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Nonrefundable credit

A type of tax credit that can reduce a taxpayer's tax bill to zero, but cannot result in a refund check if the credit amount is more than the tax owed.

Internal Revenue Code of 1986

The main body of federal tax law in the United States, outlining rules for income, deductions, credits, and other tax-related matters.

Taxable year

The annual period (usually January 1st to December 31st for individuals) over which a person reports their income and calculates their tax liability.

Adjusted Gross Income (AGI)

A taxpayer's total income reduced by certain specific deductions, used as a starting point for calculating tax and determining eligibility for many tax benefits.

Modified Adjusted Gross Income (MAGI)

A calculation of a taxpayer's AGI with certain deductions or exclusions added back. It's often used to determine eligibility for specific tax credits or government programs, as it can paint a fuller picture of income.

Dependent

A qualifying child or qualifying relative whose expenses can be claimed by a taxpayer for certain tax benefits, such as deductions or credits.