Your tax liability starts with the number on line 16 or the tax on your income. It is then increased or decreased by non refundable credits and other taxes such as self-employment tax. If this number is NOT $0, then you can use non refundable credits such as the EV credit. If this number is $0, you would not be able to take the credit.
The easiest way to explain this although not a thorough explanation is, if line 16 would be $14,000, but you had $15,000 withheld from your pay for taxes and you made estimated tax payments of $5,000, you would have a refund of $6,000.
Before any other adjustments you would still have the tax liability of $14,000. This means you would be able to take the $7,500 credit which would reduce your $14,000 liability to $6,500 on line 24 (assuming no other nonrefundable credits or other types of taxes)
On the other hand, if you only had a tax liability of $4,000 on line 16 and no other taxes, you would only be able to take a credit of $4,000 because your tax liability is only $4,000 and the EV credit is able to reduce your tax liability to $0, but not below $0. Meaning, you will not get a refund of the remaining $3,500.
Having a refund does not mean you do not have a tax liability.
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