What is the earned income tax credit?

The earned income tax credit (EITC) is a tax credit available to some low-income taxpayers in Texas. It is a refundable credit, meaning it can reduce the taxes owed to zero and result in a refund to the taxpayer. The federal government offers an EITC to eligible taxpayers, and Texas may offer a supplemental credit if the taxpayer meets certain requirements. Eligibility for the EITC is based upon the amount of an individual’s earned income. If the income is below certain thresholds, they may be eligible to receive the credit. The amount of the credit varies depending upon the taxpayer’s filing status, number of children in the household, and total earned income. Generally, the more income earned and the more children in the household, the higher the amount of the credit. The EITC helps to reduce the amount of taxes a taxpayer owes, and in some cases it can result in a refund. This makes the EITC an important financial tool for many low-income individuals and families throughout Texas. Taxpayers should review their eligibility and determine if they are eligible to receive the EITC.

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What is the earned income tax credit?

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