Final answer:
The correct credit is the American Opportunity Tax Credit (AOTC), which helps with college expenses during the first four years of higher education. It contrasts with the non-refundable Lifetime Learning Credit (LLC) and the refundable Child Tax Credit (CTC), which aids families with children.
Step-by-step explanation:
The credit being referred to that is a non-refundable tax credit for qualified higher education tuition and expenses paid for an eligible student is the American Opportunity Tax Credit (AOTC). This credit can cover expenses such as tuition, fees, and course materials for the first four years of post-secondary education, and is partially refundable. It's important to note that not all credits are refundable; for instance, the Lifetime Learning Credit (LLC) can reduce the amount of tax you owe but is not refundable. These credits aim to make higher education more accessible and affordable for students and families.
In contrast, tax credits like the Child Tax Credit (CTC) directly support working families by offsetting the costs associated with raising children. As part of the American Rescue Plan introduced by President Joe Biden, this credit was expanded, providing a greater monthly payment to assist with childcare costs and reduce child poverty. Unlike education-related credits, the CTC acts more like a grant by providing direct financial support rather than reducing tax liability.