Many low-income families in the US take advantage of the earned income credit program of the US government. Under this, they receive some credit on their tax returns. And it benefits low and moderate-income families in numerous ways at every stage of life.
As the name dictates, earned income credit depends on a percentage of a person’s earned income. It begins to reduce as the income of a person increases with time. As a result, American families with more children can claim more tax credit on their tax returns.
IRS issues the EIC table to help beneficiaries determine the credit they can claim on their tax return. Due to the earned income credit program, many individuals who earn a low income have got benefitted in many ways.
Individuals who qualify for this program can offset their tax liability and get a refund. However, as per the American Rescue Plan Act 2021, the rules for EIC have undergone some changes for the year 2021. Hence, individuals must see whether they qualify under this act or not.
Using the EIC table/chart, low-income earning individuals can easily see the amount of tax credit they are eligible for. Form 1040 is required to claim the earned income tax credit and enjoy many benefits for themselves and their children.
Earned Income Credit helps to supplement the wages of low and modern income families. Thus, it helps to reduce poverty in America to a great extent. Besides, EIC also improves infant and maternal health, social security retirement benefits, and provides better education for children.
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