Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working individuals and families. The credit reduces the amount of taxes owed and may also provide a refund to those who qualify. The EITC is designed to encourage and reward work, reduce poverty, and support children and families.
History of the Earned Income Tax Credit
The EITC was first enacted in 1975 as part of the Tax Reduction Act of 1975. The credit was intended to offset the burden of Social Security taxes and to provide an incentive to work. Since then, the credit has been expanded several times, most recently in the American Recovery and Reinvestment Act of 2009. The credit is now available to individuals and families with incomes up to $53,930 for the 2020 tax year.
Comparison of EITC Benefits
| Income Level | Maximum Credit |
|---|---|
| $0 – $15,570 | $538 |
| $15,571 – $41,094 | $3,584 |
| $41,095 – $53,930 | $5,920 |
Summary
The Earned Income Tax Credit is a federal tax credit designed to reduce poverty and reward work. The credit is available to individuals and families with incomes up to $53,930 for the 2020 tax year. For more information about the EITC, visit the Internal Revenue Service website or consult a tax professional.
See Also
- Child Tax Credit
- Additional Child Tax Credit
- Tax Refund
- Tax Deduction
- Tax Exemption
- Tax Credit
- Tax Bracket
- Tax Rate
- Taxable Income
- Taxable Property
