Refundable Tax Credits Provide Tax Surplus to 30% of US Households in 2009

According to a recent study by the Joint Committee on Taxation (a nonpartisan committee of the United States Congress),  more than 50% of US households had zero income tax liability which means they paid no federal income tax in 2009.  Almost 30% of US households got their income taxes back plus additional funds thanks to refundable tax credits.

What are refundable tax credits?

In general, a tax credit is an amount that decreases the tax that is owed.  Most tax credits are applied to the tax until zero tax liability is achieved.  However, a refundable tax credit enables the tax liability to cross over zero resulting in a refund check from the government.  Some examples of refundable tax credits from 2009 include:

  • The Earned Income Tax Credit
  • The First Time Home Buyer’s Tax Credit
  • The Making Work Pay Tax Credit

Author: Anne-Marie

I love what I do! I love reading the Internal Revenue Code, U.S. Treasury Regulations, and any court case involving tax. I enjoying keeping up with tax law changes and filling out tax forms. I, honestly, got into law because I want to help people. After I completed my education, I went to work for a major accounting firm as an international tax consultant. I researched U.S. and foreign tax implications of liquidating foreign subsidiaries and assisted large corporations restructure their global enterprise to avoid U.S. taxes. This was all very interesting and challenging work, but I'd lost sight of my goal to help people. I recognized I needed to start my own business if I really wanted to help individuals. Rábago Law is the realization of these aspirations - to partner with individual taxpayers and small business owners to understand their unique circumstances, simplify their obligations, ease their tax concerns, and help them build strong financial futures.

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