Earned Income Tax Credit

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Earned Income Tax Credit

Also called the EITC. A dollar-for-dollar reduction in the tax liability for lower and middle income persons in the United States. The credit is applied against taxes owed on wages, salaries, tips and other forms of earned income. Investment income is excluded and one may not have more than a certain amount of investment income to be eligible for the credit. Households with children may receive larger credits. The EITC is refundable, meaning if the credit causes one's tax liability to go below zero, one receives the difference from the IRS.
References in periodicals archive ?
A bipartisan proposal introduced last week in the House Revenue Committee would accomplish that worthy goal by more than doubling the value of Oregon's earned-income tax credit, a tax break designed to help low-income families with child- ren.
House Bill 2966 would increase the state's earned-income tax credit from the current 5 percent of the federal credit to 12 percent.
18 to win legislative approval of a state earned-income tax credit for low-income workers.
President Clinton proposed expanding the earned-income tax credit, which provides an annual payment to 19 million working families at or near the poverty line.
The Congressional Budget Office estimated that with the average tax rate paid for all federal taxes in 1988 - before further increases in the top income tax rate, Medicare payroll taxes and the earned-income tax credit, all of which increased progressivity - the top 10 percent of earners faced an average tax rate more than twice that of low earners, while the top 1 percent faced more than triple that rate.
And the earned-income tax credit, one of the best benefits for the working poor, was cut by $5 billion.
Right now, we're deeply involved in legislative battles as diverse as welfare reform, land mines, and the earned-income tax credit.
Rather, the IRS has been pushed by the Republican-controlled Congress to catch cheaters who abuse the earned-income tax credit, a Ronald Reagan initiative to help the working poor get off welfare.
The House Ways and Means Committee endorsed a $23 billion cut in the earned-income tax credit for low-income families.
Mahony said the state should create its own earned-income tax credit and income-tax credit for poor children.
He also favors establishment of a state earned-income tax credit for the middle class that would amount to a 13 percent tax cut for individuals earning $60,000 or less or families with a combined income of $100,000 or less.
By Clinton's reckoning, the White House and Congress remain about $100 billion shy of agreeing on cuts in the main areas - welfare, Medicare, Medicaid and the earned-income tax credit for the poor - that are the guts of any budget accord.