What does a refundable credit enable a taxpayer to do?

A refundable credit allows a taxpayer to receive a refund beyond their tax liability, making option B the best choice. This means that if the amount of the refundable credit exceeds the tax owed, the taxpayer will receive the difference as a refund.

For example, if a taxpayer has $700 in tax liability but qualifies for a $1,000 refundable credit, they would reduce their tax liability to zero and receive a $300 refund from the government. This feature makes refundable credits particularly valuable because they can effectively provide financial support to individuals even if they do not owe taxes.

The other options do not accurately describe the nature of a refundable credit. Reducing taxable income to zero is relevant to deductions or non-refundable credits, which do not result in a refund exceeding the tax liability. Claims related to business expenses and tuition affect different tax credits or deductions that do not fall under the category of refundable credits. Thus, the correct understanding is focused on the refund aspect that a refundable credit provides.