SOME low-income workers might be receiving some tax credit packages in the next year that can go as high as $6,000.
The Earned Income Tax Credit, a federal benefit that is offered to low-income workers depending on their family size, functions as a work incentive to pay benefits as a percentage of one's income up until a cap.
The EITC operates as a tax credit with benefits for low earners, primarily targetting those with children and families.
For example, someone with two kids can receive a credit up to 40 percent of their earnings for a maximum of $5,980, up until they earn an income of $42,000 or more.
Low earning but childless workers can receive up to $543, but with the American Rescue Plan Act, that number has been bumped up to $1,502.
The tax credit is fully refundable, allowing taxpayers who do not owe any income tax or pay a small portion that is less than what they are owed in EITC, they can receive the rest of their credit in cash.
The EITC is approaching its 50th anniversary very soon, and it's important to look at how it came into law.
The tax credit was first offered in 1975 as a temporary benefit as part of a tax cut package intended as an economic stimulus.
Most read in US News
Officer Kim Potter tells of 'chaotic' struggle before Daunte Wright shooting
Moment hero Amazon driver saves customer's daughter from ferocious pit bull
Prince Andrew’s accuser wasn't called to give evidence at Maxwell trial
Baldwin 'partly responsible' for killing daughter, says Halyna Hutchins’ dad
After it was extended multiple times, it became permanent in 1978.
Over time, its benefits have increased just as the income cap and other financial incentives has helped countless low-income earners make ends meet.
Read our stimulus checks live blog for the latest updates on Covid-19 relief…
There is renewed interest in adding benefits to the credit or making a sort of new credit altogether – but it's having trouble in Congress.
With the Build Back Better proposal all but dead in Congress, people are still pushing for increased tax credits to ensure everyone can make ends meet.
Source: Read Full Article