Computing tax credits

The video tutorial explains tax credits as reductions in taxes owed to the government, contrasting them with deductions. It categorizes tax credits into affirmative and contingent types, detailing how each affects tax liability. Affirmative credits can reduce liability below zero, potentially resulting in a refund, while contingent credits may be non-refundable or partially refundable. Examples include the earned income credit and child tax credit, illustrating their application in the US tax system.

Describe the concept of a partially refundable tax credit and provide an example.

What is the earned income credit and who is it designed for?