• Line 19 on Form 1040, and Schedule 1 Lines 1 through 6, are for nonrefundable credits. Such credits can only be used to offset taxes due (Line 16 on the 1040). In contrast, refundable credits benefit the taxpayer even if no tax is due. The Earned Income Credit, for example, often results in a tax refund of thousands of dollars.
    • The child tax credit is a hybrid – part of the credit can be nonrefundable, and the rest refundable. Similarly,  the American Opportunity Credit remains a hybrid – it goes to Line 3 of Schedule 3, as needed, and the refundable portion, if any, can flow to Line 29 of Form 1040.
  • Nonrefundable credits are found on the Credits page of TaxSlayer [Deductions > Credits Menu], as shown under tab G of Pub 4012.
  • If the amount of nonrefundable credits is greater than the tax due, that may affect other calculations, such as the amount of capital loss carryover that created a tax benefit, or the amount of a state tax refund that is taxable.
    • Enter all information for nonrefundable credits for which the taxpayer is eligible in TaxSlayer, regardless of their anticipated effect on the total tax owed. They may provide a benefit in the next tax year.

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