In: Accounting
Recall the seven rules that all taxpayers must meet in order to claim Earned Income Credit (EIC). How has the EIC helped taxpayers? What are the benefits not only for tax purposes but for society?
The Earned Income Tax Credit or EITC is a tax credit to those having low to moderate-income. To qualify for the credit there are some rules which you must fulfill to avail the EITC, which are listed below:
EITC has helped taxpayers, mainly to lower-income groups who feel the income tax as an extra burden upon themselves. EITC helps to reduce the amount of tax liability by giving credits, or a person may even get a refund through the same. EITC could cause people to reduce their working hours, as credit will reduce with every $ increase in income.
EITC can help society at large by lifting people out of poverty. It is also linked with a reduction in the low birthweight rate of infants. Reports show that in 2017 EITC lifted more than 5 million people lift out of poverty. It basically improves health by providing extra income to working families. Not only this, but it also connects with the increase in the economic activity at many levels.