How is Thomas's Child and Dependent Care Credit categorized in relation to refunds?

The Child and Dependent Care Credit is a non-refundable tax credit, which means that it can reduce a taxpayer's federal income tax liability to zero, but it cannot result in a refund exceeding the amount of taxes owed. This credit is aimed at helping taxpayers with the costs of care for children under 13 or for dependents who are unable to care for themselves while the taxpayer works or is looking for work.

In this case, since Thomas's Child and Dependent Care Credit is categorized as non-refundable, it highlights the credit's purpose of providing tax relief rather than generating a cash refund. Taxpayers are only able to utilize the credit to offset their tax liability; they will not receive a refund for any unused portion of the credit beyond what they owe in taxes.

The other options, such as being fully refundable or partially refundable, would imply that taxpayers could receive a refund from the credit itself, which is not the case here. The concept of transferability does not apply to this credit under current tax legislation. Therefore, categorizing the Child and Dependent Care Credit as non-refundable accurately reflects its characteristics and functionality in the tax system.