Is Thomas's child and dependent care credit reported as a non-refundable credit on Form 1040, Schedule 3?

The child and dependent care credit is indeed reported as a non-refundable credit on Form 1040, Schedule 3. This specific tax credit allows taxpayers to reduce their tax liability for expenses incurred while caring for dependents, like children under age 13, or other qualifying individuals who are physically or mentally incapable of self-care.

The key characteristic of a non-refundable credit is that it can reduce the tax liability to zero but cannot result in a refund beyond that point. In other words, if the credit exceeds the amount of tax owed, the excess cannot be refunded to the taxpayer. This feature distinguishes it from refundable credits, which can result in a payment to the taxpayer even if their tax liability has been completely offset.

The correct classification of the child and dependent care credit as a non-refundable credit is vital for taxpayers to understand, as it impacts how they can utilize the credit toward their overall tax obligation on their Form 1040.