Which program provides a refundable tax credit for workers that can increase refunds?

• A. In kind assistance
• B. Medicaid
• C. Earned Income Credit
• D. SSI

Answer: (C)

The key idea is how refundable tax credits can boost a taxpayer’s refund. The Earned Income Credit is a refundable tax credit for low- to moderate-income workers. Because it’s refundable, if the credit amount is larger than your tax liability, you don’t just reduce what you owe—you actually receive the difference as a cash refund. That means it can increase your refund even if you owe little or nothing in taxes to begin with.

In contrast, the other options aren’t tax credits that increase refunds. In-kind assistance provides noncash help, Medicaid covers health care, and SSI is needs-based cash assistance, none of which function as a refundable tax credit.