Earned Income Credit | Meaning and Definition

What is the full form of EIC? 

The full form of EIC is Earned Income Credit, which synonymously goes by the name tax credit, which is a provision provided to employees with low income and minimum wages. The EIC is claimed when the employee files her or his return of individual tax.

Benefits of Earned Income Credit

The earned income tax credit (EITC) provides assistance to all the moderate to low earning workers as well as families to get a tax break. If one qualifies for the provision, he or she can simply use the credit that reduces the amount of taxes owed by him or her respectively. It also results in an increase in one’s refund. 

Qualification for EITC

Individuals or workers having moderate to low incomes qualify to claim the benefit of EITC. The amount of EITC depends upon one’s number of children, dependents, disabilities, or other affecting criteria as well.

Clergy and military are provided with special EITC rules because using EITC may have an effect on other benefits provided by the government. 

How to claim EITC?

There is a list of rules and criteria provided to claim the earned income tax credit for the past tax years.