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Earned-Income Tax Credit

The Earned-Income Tax Credit (EITC) is the United States’ largest antipoverty program for working families and individuals. Low- to moderate-income Americans use the tax credit for home and auto repairs, groceries, and education. The majority of this tax credit goes to working low-income families with children. The tax credit is money given back to the eligible tax payer and in turn provides working families with additional resources to combat poverty. The goal of the EITC is to incentivize work among low-income families and individuals by reducing the tax burden these people face.

How the EITC Works

To claim the credit, a taxpayer must have earnings from a job. The EITC is refundable, meaning that if it exceeds a low-wage worker’s federal income tax liability, the Internal Revenue ...

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