SANZC02
Well-Known Member
- First Name
- Bob
- Joined
- Feb 11, 2021
- Threads
- 30
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- 5,353
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- Location
- California
- Vehicles
- Tesla Model S, LE - R1S
- Occupation
- Retired
I do not think we are saying the same thing. A lot of people assume it is what they owe when filing their taxes not what their tax liability is. I was attempting to explain it but based on the @jbbrown1978 response in #105 it appears I am not clear enough.You're both actually saying the same thing but "refund" is a somewhat overloaded term here leading to some confusion.
To jpbrown's point, if you only have a $5000 tax liability, the credit can only reduce your liability to $0. You can't get a $2500 refund hence this being referred to as a non-refundable credit.
SANZC02, your example is also correct but you seem to be conflating the idea of a refundable credit with that of getting a refund at filing time for having overpaid throughout the year with respect to your liability (a refund of your tax payment). Obviously the credit can cause you to receive a payment refund for overpayment of tax but that is not the same as the credit itself being refundable.
I cannot count how many times people have told me they need to adjust their tax withholding to make sure they can use the entire 7500.
My suggestion, please talk to you tax accountant….
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