The most popular tax credit in the United States is the Earned Income Tax Credit (EITC). The EITC is a refundable tax credit that is available to low-to-moderate income workers and their families. It was created to provide a financial incentive for people to work and to help offset the impact of Social Security taxes on low-income workers.
The EITC can provide a significant tax benefit for eligible taxpayers. The amount of the credit is based on income, marital status, and the number of qualifying children in the household. For the 2021 tax year, the maximum credit amount for a household with three or more qualifying children is $6,728.
The EITC is a popular tax credit because it can provide a significant financial boost to low-income families. According to the IRS, in the 2020 tax year, more than 25 million taxpayers received nearly $62 billion in EITC payments.
It’s important to note that the EITC has eligibility requirements and limitations, and it’s recommended to consult with a tax professional to determine if you’re eligible for the credit and to ensure that you’re properly claiming it on your tax return.