Final Answer:
If you are supporting a spouse who attended school and had $3000 in taxable income all of their non-refundable tax credits can be used to reduce your tax. Therefore correct option is (B) all of their non-refundable tax credits can be used to reduce your tax.
Step-by-step explanation:
When supporting a spouse who attended school and had $3000 in taxable income, claiming their tuition tax credit (Option A) isn't applicable because the spouse's income is too low to benefit from this credit. Option C regarding the caregiver tax credit is not applicable in this scenario either. However, Option B regarding non-refundable tax credits is pertinent.
Non-refundable tax credits, such as education and tuition credits, can be transferred to the supporting spouse if they cannot utilize the full amount. Since the spouse's taxable income is $3000, they may not need the full benefit of these credits to reduce their own taxes owed. In such cases, the remaining amount can be transferred to the supporting spouse, reducing their taxable income.
For instance, if the spouse attended school and has $3000 in tuition credits but only $500 in taxes owed due to their low income, the remaining $2500 of unused tuition credits can be transferred to the supporting spouse, potentially reducing their tax liability.
In conclusion, Option B stands true as the supporting spouse can benefit from the unused non-refundable tax credits of their partner, provided they meet the eligibility criteria and have the necessary tax liability to apply these credits against.
Therefore correct option is (B) all of their non-refundable tax credits can be used to reduce your tax.