Which of the following is a tax credit type mentioned?

• A. Grants
• B. Refundable tax credit
• C. Transferable refundable tax credit
• D. Occasional bonuses & perks

Answer: (C)

A tax credit that is both transferable and refundable combines two key features: you can transfer or sell the credit to another taxpayer, and if the credit isn’t used to offset tax liability, you can still receive a cash refund. That means the credit has flexibility for investors and can provide actual cash benefits even if the original taxpayer doesn’t owe enough tax to use the full amount. This dual nature is why the term “transferable refundable tax credit” is the best fit.

Grants aren’t tax credits at all; they’re separate funding. A refundable tax credit exists, but without the transferability feature, it doesn’t capture the full concept described. Occasional bonuses and perks aren’t tax credits either, since they’re compensation or incentives, not tax provisions.