Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a refundable tax credit in the United States available to those with income from employment. It is a way by which the federal government offsets the tax burden of and provides financial support to low-to moderate-income households. As the basic tenets of the American welfare state were transformed in the 1990s, emphasizing work-conditioned benefits, the cash welfare program shrank substantially, and the EITC expanded. The EITC contrasts with cash welfare in its requirements, delivery method, and meaning. It differs from other safety net programs like the Supplemental Nutrition Assistance Program (food stamps) and housing assistance in that it provides cash benefits rather than in-kind support. Therefore, this form of government assistance is unique in the country.