What is the purpose of the Earned Income Tax Credit (EITC)?

The purpose of the Earned Income Tax Credit (EITC) is specifically to provide tax relief to low-income working individuals and families. This credit is designed to reduce the tax burden for these populations and to encourage increased participation in the workforce. By offering financial support through tax refunds and credits, the EITC helps to alleviate poverty and promote economic stability among working families.

The EITC is particularly impactful because it not only increases disposable income for low-income earners but also has the potential to encourage employment. By providing a financial incentive for working, the credit supports labor force participation, which is essential for both individual financial well-being and the overall economy.