If the Davises did not qualify for any education credits, how would this affect their tax return? Their tax liability would:

Question

Increase, while their total payments would increase; thus, increasing their refund.
Increase, while their total payments would decrease; thus, decreasing their refund.
Decrease, while their total payments would decrease; thus, increasing their refund.
Decrease, while their total payments would increase; thus, decreasing their refund.

Answer 1

If the Davises did not qualify for any education credits, their tax liability would increase because they would not be able to reduce that liability with the available education credits. If their tax liability increases while their total payments (withholdings, estimated payments, etc.) remain the same, this would lead to a decrease in their refund.

Thus, the correct option is:

Increase, while their total payments would decrease; thus, decreasing their refund.