Glossary
Refundable tax credit
A credit paid out even when it exceeds the tax you owe — the EITC is the biggest example.
A refundable credit reduces your tax bill and, if anything is left over, the IRS sends the remainder as a refund. A non-refundable credit can only reduce your tax to zero.
The EITC is fully refundable, which is why low-income workers who owe no tax must still file a return to collect it.