Earned Income Tax Credit: A Refundable Tax Credit For Low To Middle-Income Families

The earned income tax credit being a refundable tax credit greatly helps families under the middle or low-income bracket.

The EITC, which is a refundable tax credit, can only be received if the taxpayer passes some important factors. (Photo: AL.com)

A Refundable Tax Credit For Struggling Families

The Earned Income Tax Credit (EITC), which is a refundable tax credit, is a valuable tax credit for low to middle-income families. Through this refundable tax credit, families can save an average amount of $2,541.

As it is a refundable tax credit, you can claim it as a refund even if you don’t owe any taxes. The amount you can get through this refundable tax credit depends on your income, tax-filing status, and number of qualifying children.

To claim the said refundable tax credit, you must meet certain criteria such as having a valid Social Security number and being a U.S. citizen or resident alien.

According to a published article by SmartNews, having an income below the specified thresholds can also make you qualify for this refundable tax credit. The IRS has an EITC Assistant tool to help determine if you qualify for this refundable tax credit.

More Information About The Earned Income Tax Credit (EITC)

In a published article by CNBC, back in 2022, 23 million people received $57 billion from the earned income tax credit, a tax break for low- to moderate-income workers.

However, nearly 1 in 5 eligible taxpayers do not claim the credit, which averaged $2,541 last year. For tax year 2023, the EITC is worth up to $7,430 for a family with three or more children, up from $6,935 in 2022.

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