Earned Income Tax Credit (EITC)

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a refundable federal tax credit designed to benefit low to moderate-income working individuals and families, particularly those with children.

The amount of the credit varies based on the filer’s income level, marital status, and number of qualifying children. For eligible taxpayers, the EITC can reduce the amount of tax owed and may result in a refund if the credit exceeds the tax liability. For example, a single parent with two children who meets the income criteria may qualify for a larger EITC compared to a single filer without dependents.

The primary purpose of the EITC is to incentivize work and alleviate poverty by providing financial support to those in the workforce.