Investment tax credit Everything all about it State and federal governments offer an Investment tax credit to uplift aiding factors of the economy, the environment, or vital things of the government. For example, a tax credit rewards people for using home-use solar panels. Other tax credits are helpful to offset learning, adoption, and care costs. The investment tax credit is better than deductions. While the deduction lessens final liability, it does so within a person’s lowest tax rate. A credit lessens tax liability in full $1. Tax Credit Types The types of investment tax credit or IRC 1202 credit are refundable, partially refundable, and non-refundable. Refundable Tax Credits These are the best credit benefits as the government pays them in full. It means that the taxpayers get the whole credit amount, regardless of their tax liability or income. When the refundable liability lessens below 40%, the taxpayer is due a refund. In the 2021 tax year, the refundable tax credit was the