Tax credits can be refundable or non-refundable.
Non-refundable credits are only good against your actual tax bill. Refundable credits, as their name implies, do allow such refunds. Tax credits have been suggested as an alternative to government-funded scholarship programs. Under education tax credit plans, the credits can be used to defray the cost of tuition or other schooling-related expenses. As with scholarship programs, tax credits are promoted as a way of increasing parental choice and control over their children's education, and of fostering a competitive educational market , thereby encouraging accountability, innovation, and efficiency.