Which of the following is a characteristic of a nonrefundable credit?

A nonrefundable credit is designed to reduce a taxpayer's tax liability but can only lower that liability to zero. If the amount of the credit exceeds the tax owed, the excess amount is not refunded to the taxpayer. This characteristic ensures that while taxpayers can benefit from reducing their tax bills, they cannot receive any additional cash refund from the government based on nonrefundable credits beyond their total tax liability.

The other options do not accurately describe nonrefundable credits. For instance, exceeding the taxpayer's tax liability or providing refunds for excess amounts pertains to refundable credits, which operate differently. The detail about applying strictly to qualified education expenses is also incorrect, as nonrefundable credits are available for various purposes, not limited to education alone. Thus, the defining quality is their limitation to reducing tax liability down to zero, without providing any further refund beyond that point.