What is the earned income tax credit?
The Earned Income Tax Credit (EITC) is a tax credit available to low- and moderate-income families in Illinois. It is designed to give back part of the taxes paid to the state, and encourage these families to work and stay out of poverty. The credit is applied to individuals and families that meet the income eligibility criteria and who have earned income from wages, self-employment, or other sources. The EITC allows eligible taxpayers to reduce their total tax liability. This means that it can actually reduce the amount of taxes owed to the state. The amount of the credit depends on the taxpayer’s income, their filing status, and the number of qualifying children they have. For those with higher incomes, the credit is smaller but still can be substantial. In addition to the federal EITC, Illinois offers its own state-level EITC. The state credit is available to any taxpayer who is eligible to receive the federal credit and is somewhat higher than the federal credit. This means that Illinois taxpayers can receive both credits and further reduce their tax liabilities. Qualifying for the EITC can be confusing, so help is available. Taxpayers can contact the Internal Revenue Service (IRS) or the Illinois Department of Revenue for information on how to apply and make sure they receive the credit.
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