How can a tax credit impact a taxpayer's refund?

A tax credit directly reduces the amount of tax owed by a taxpayer, and if the tax credit exceeds their total tax liability, it can result in a larger refund. Unlike a deduction, which only reduces taxable income, a tax credit offers a dollar-for-dollar reduction in tax liability. This means that when taxpayers have credits such as the Earned Income Tax Credit or Child Tax Credit, they can potentially receive a refund that exceeds the amount they paid in taxes, effectively increasing their refund amount. This impactful nature of tax credits is why the correct choice is that they can make a refund bigger.