Refundable tax credit
A tax credit that is paid to you as a refund when it is bigger than the tax you owe.
A refundable credit first cancels your tax. Whatever is left over comes back to you, even if you owed nothing at all. The Earned Income Tax Credit is fully refundable, and the child tax credit is refundable up to $1,700 per child for 2026.
You only get a refundable credit by filing a tax return, even in a year when you aren't required to file.
Example
If you owe $400 and have a $1,000 refundable credit, your tax drops to $0 and you get $1,000 − $400 = $600 back.