Nonrefundable Credits

A nonrefundable credit can only reduce the tax liability to zero. All the credits discussed in this lesson are nonrefundable credits.

Generally, nonrefundable credits are applied against federal tax in the order they are listed on Form 1040, Tax and Credits section, page 2.

The tax software will calculate these credits, but you must enter the correct information and make the correct determinations by using an intake and interview sheet and your resource materials.