Nonrefundable Credit

A tax credit that can reduce your tax liability to zero, but won't generate a refund beyond that — if the credit is worth more than you owe, you don't get the difference back as cash (though some nonrefundable credits, like the former Residential Clean Energy Credit, allow you to carry the unused portion forward to a future year). This is different from a refundable credit, which can generate a refund even below zero tax owed.