Introduction

This chapter discusses the following credits.

• Rate reduction credit.
• Adoption credit.
• Foreign tax credit.
• Mortgage interest credit.
• Credit for prior year minimum tax.
• Credit for electric vehicles.
• Credit for excess social security tax or railroad retirement tax withheld.
• Credit for tax on undistributed capital gain.

Several other credits are discussed in other chapters in this publication.

• Child and dependent care credit (chapter 33).
• Credit for the elderly or the disabled (chapter 34).
• Child tax credit (chapter 35).
• Education credits (chapter 36).
• Earned income credit (chapter 37).

Nonrefundable credits. The first part of this chapter, Nonrefundable Credits, covers six credits that you subtract directly from your tax. These credits may reduce your tax to zero. If these credits are more than your tax, the excess is not refunded to you.

Refundable credits. The second part of this chapter, Refundable Credits, covers two credits that are treated as payments and are refundable to you. These credits are added to the federal income tax withheld and any estimated tax payments you made. If this total is more than your total tax, the excess will be refunded to you.

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