The Earned Income Tax Credit (EITC) is a benefit that low-income workers can receive when their income falls below a certain threshold. These filings hit a record high in 2013 and returned a record amount of $68 billion to filers.
The Earned Income Tax Credit was created to help ease the burden of low income families who are still working. However, some feel the program has turned into a huge “cash entitlement anti-poverty” program that no longer seems to be encouraging poor individuals to look for work.
Research seems to indicate that the EITC entitlement caused a percentage of married mothers to avoid seeking employment and instead raise children. Couples may be reasoning that two wage earners would actually reduce the amount received from EITC and increase other expenses like child care.
Increasing other expenses tends to lower their disposable income.
So, the question remains if the EITC will be changed at some time in the future, or if it will continue as is.
The other side of the coin is that many families struggling to make ends meet benefit from the EITC, and are still looking to enter the workforce.
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Law Offices of Darrin T. Mish, P.A.: Tax Attorney