What is the Earned Income Tax Credit?
The Earned Income Tax Credit is a refundable federal income tax credit for low-income working individuals and families. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. The Earned Income Tax Credit was responsible for significant declines in poverty and economic gains during the 1990s, but it can still be strengthened to improve its effectiveness. The Center for American Progress has proposed four ways to improve the existing EITC so that poor families can better help themselves rise out of poverty while stimulating consumer spending and economic growth. Current Credit: Under the current law, the fact that the income of both spouses is fully counted in the EITC benefit calculation means that an EITC benefit may be reduced or lost if two low-earning individuals m
The Earned Income Tax Credit is a federal tax credit for low-income families. To find out if you may be eligible, visit the IRS. Visit LibrarySpot’s Tax Center for tips and tools to make filing easier. View more articles, questions or lists. Advertisement More to Explore Departments Articles Answers Lists Exhibits Trivia In the Spotlight Most Popular Dictionaries Encyclopedias Genealogy Government Maps Medical Librarian’s Shelf Library Jobs Library Associations Library Conferences Much more… Related Spots BookSpot.com GenealogySpot.com HomeworkSpot.com MuseumSpot.com The StartSpot Network Back to Home Page s s Find more useful resources in popular areas of the StartSpot Network… s Today’s Headlines Bestselling Books Online Museums State Government Jobs by State Click and Give Genealogy How-To Science Fair Ideas Bargain Travel Consumer Guides Recipes White Pages s feedback feedback feedback –> © 1997-2009, StartSpot Mediaworks, Inc.
The earned income tax credit was established in 1975 to combat trends that have led to a high child poverty rate, and boosting the incomes of low and moderate income workers. Another goal of the credit is to help welfare recipients make the transition back to work. The credit is available to employees who meet certain criteria or qualifications. It is a refundable credit that may be available to you if you are a lower income worker and meet other certain criteria such as your adjusted gross income is under a specific limit set forth by the IRS. Earned income tax credit is by definition a credit and therefore not considered income by the government. It is a unique credit which lower income workers can deduct on their tax return every year. Even if you had no tax withheld or do not owe any tax to the IRS on your tax return, you should still try to get the credit. Some people might still get some money back because the earned income credit is a refundable credit. However, if you fraudulen
The earned income tax credit (EITC) provides a subsidy for low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches a maximum; both the percentage and the maximum credit depend on the number of children in the family. The credit then stays flat at that maximum as earnings continue to rise, but eventually earnings reach a phase-out range. From that point the credit falls with each additional dollar of income until it disappears entirely (figures 1 and 2). The phase-out begins at a higher income for married couples than for single parents. The credit is fully refundable: any excess beyond a family’s income tax liability is paid as a tax refund.
