A tax credit lowers your taxable income so you will pay less tax. However, the electric car credit is a non-refundable credit and can only lower your taxable income to 0.
There are two types of tax credits available for taxpayers: refundable and non-refundable. Both types offer you the chance to lower the amount of taxes you owe, but only refundable credits can also get you a tax refund when you don't owe any tax.
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