Which benefit can yield a refund even if no tax is owed due to earned income?

• A. Medicaid
• B. Public assistance programs
• C. Earned Income Credit
• D. SSI

Answer: (C)

The idea being tested is refundable tax credits. Among common benefits, the Earned Income Credit is designed as a refundable credit for low- to moderate-income workers. If the credit amount is larger than any tax you owe (even if your tax liability is zero), the IRS pays the difference as a refund. So you can receive cash back from the government even when you don’t owe any income tax. The exact credit depends on earned income, filing status, and how many qualifying children you have, but the key point is that this credit can yield a refund regardless of tax owed. In contrast, Medicaid is a health program, while SSI and public assistance are needs-based benefits, not tax refunds.