What is a characteristic of the Additional Child Tax Credit?

The Additional Child Tax Credit is considered a refundable credit because it allows taxpayers to receive a refund even if the credit amount exceeds their tax liability. This means that if a taxpayer qualifies for the Additional Child Tax Credit and their credit is greater than the amount of tax owed, they can get the difference back as a refund.

This characteristic differentiates it from nonrefundable credits, which can reduce tax liability to zero but do not provide a refund. The Additional Child Tax Credit specifically targets families with qualifying children, thus providing more financial relief to those who may have low or no tax liability. Being refundable is a significant feature, as it provides support to families regardless of their overall tax situation.