What do partially refundable tax credits offer?

Partially refundable tax credits are designed to provide a benefit that can result in a refund even if the taxpayer's liability is less than the total credit amount. This means that if the tax credit exceeds the amount of taxes owed, the taxpayer can receive a portion of the remaining credit as a cash refund. This is particularly beneficial for taxpayers who may have a low tax liability or none at all but still deserve some financial relief based on their qualifications for the credit.

This structure helps to promote equity, allowing low- to moderate-income taxpayers to receive financial assistance when they might not have a large tax bill but still face significant economic challenges. The result is that while the credit cannot exceed the total owed in taxes, taxpayers can still benefit from the excess amount in the form of a refund.