There are some low income workers that may receive tax credits worth as much as $6,000 next year.
Low income workers are eligible for the earned income tax credit, which is a federal benefit for low wage earners depending on their family size.
The EITC helps families with children the most.
A person with two kids may get a credit that’s 40% of their earnings. The maximum is $5,890, until they hit an income of $42,000 and higher.
Low income workers without children can earn up to $543 usually, but under the American Rescue Act they can now see as much as $1,502.
The credit is refundable, so whatever’s left after taxes owed is owed to the taxpayer.
This credit has been around for almost 50 years, first starting in 1975 temporarily.
It was extended multiple times and used as an economic stimulus until being turned into a law in 1978.
The benefits have increased over time to help low income earners survive.
Many are hopeful for additional provisions similar to the EITC to be passed under the Build Back Better plan.