Tax credits reduce a taxpayer's tax liability and in some cases can create a refund. Research and discuss the following tax credits: (1) Credit for Elderly and Disabled (2) Earned Income Tax Credit. Why were these enacted? Are the credits refundable?
The Earned Income Tax Credit (EITC) was designed as a tax credit for what is now called "America's working poor." The EITC awards taxpayers a tax rebate based on certain factors, and up to the amount of the phase-out. The EITC is based on earned income -- that is, income that is earned from wages. As long as the taxpayer has earned income and makes below a certain amount of money per year (around $13,600 for a single taxpayer), the EITC provides a tax rebate, which acts as money-in-hand. The EITC is a ...
The solution provides a detailed discussion examining the Credit for Elderly and Disabled and the Earned Income Tax Credit (EITC).