Earned Income Tax Credit

Earned Income Tax Credit

Each year millions of eligible workers risk missing out on the Earned Income Credit (EIC), the Child Tax Credit (CTC) and free tax filing assistance for low- and moderate-income workers because they do not know they qualify, do not know how to claim the credits or do not know where to find free tax filing assistance. Your outreach efforts can ensure that eligible workers can receive the tax credits they’ve earned.

The boost provided by the EITC and other valuable federal tax credits provide many working families the opportunity to pay their household bills and meet their children’s needs even through salary cutbacks or periods of unemployment. Yet according to the IRS, each year millions of eligible workers do not claim their credits, missing out on millions of dollars they earned.

In 2011, the EITC lifted about 6 million people out of poverty, including about 3 million children. The poverty rate among children would have been one-quarter higher without the EITC. The EITC lifts more children out of poverty than any other program.  Learn more

More about the EITC:

• Tax Credits for Lower-Income Working Families Help 21 Million Mothers
• Reducing Overpayments in the Earned Income Tax Credit
• Fact Sheet: The Earned Income Tax Credit and Refundable Child Tax Credit in Rural America
• Questions and Answers About the EITC
• 2012 Earned Income Tax Credit Estimator
• IRS.gov - EITC Awareness Day
• Podcast: The Earned Income Tax Credit
• Policy Basics: The Earned Income Tax Credit
   

Background

The Earned Income Tax Credit (EITC), a federal tax benefit for low- and moderate-income workers, reduces the impact of the payroll and income taxes they pay; it also supplements the earnings of very low-wage workers.  Building on the EITC’s success, roughly half of the states have enacted state EITCs, which offset state taxes and supplement wages for low-income workers.