EITC is designed to help lower-income working families.
In 2020 the average payout was $2,411.
How much of the EITC is refundable?
The Earned Income Tax Credit (EITC) was introduced to help lower income families keep more of their money. It is a refundable tax credit that you may be able to get even if you don’t owe tax. Read more about it here.
The tax credit is reduced to the amount of tax owed to the federal government. From there it can be refunded if your tax credit is larger than your tax liability.
In order to claim the EITC, you must file a tax return to the IRS. The value of the credit changes every year and depends on earnings, dependents and marital status.
Around 20% of eligible workers don’t claim EITC. In 2020, 25 million tax payers benefited from this program. Almost $60 billion was sent out by the federal government.