What does 'non-refundable tax credits' mean? I need a clear explanation of this term.?
- Fred SLv 79 years agoBest Answer
NRTCs are tax credits, meaning you can use them to reduce taxable income, but won't be refunded if you don't use them all.
If your income is $15,000 and your NRTCs are $15,000, your tax is zero.
If your income is $15,000 and your NRTCs are $18,000, your tax is still zero. You don't get a refund for unused NRTCs.
- LaLaLv 69 years ago
It means that they are applied against your taxable income to reduce the amount of taxes you pay, ideally bringing your tax liability to zero (which would mean less owing or a larger refund of your taxes), but that you do not get any of it back if there is a credit left over.
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- EvelynLv 44 years ago
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A refundable tax credit can reduce your total tax to a negative number, which means the government pays you(refund). A non-refundable tax credit can reduce your tax to zero but your tax can’t go below zero. (no refund)
- Anonymous9 years ago
Non-refundable credits are credit like the one everyone gets as a "personal amount" or "disability amount". These are credits that are used to reduce your taxes but that DO NOT come to you in cash if you are unable to use them in the year.
For example, the balance of provincial tax credits are Refundable as they are paid to the taxpayer after federal tax is calculated.