“How can tax credits exceed tax paid.... ???”
Earned Income Tax Credit passed in exchange for eliminating some forms of welfare. Instead of paying someone to sit on their butts, you have them work and then give them a bonus via the tax system.
“The earned income tax credit (EITC), first proposed in the early 1970s, was signed by President Ford. It was later substantially expanded by President Reagan, who deemed it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress”.”
Other refundable credits include some for education, which then functions like a grant to help a student with expenses outside of tuition.
Other tax credits can only reduce your tax burden to zero, and then become meaningless beyond that point.
It’s always fun to hear of that check as a tax “refund”...