What exactly is Earned Income Tax Credit?

I%26#039;ve been trying to research alternative solutions instead of raising minimum wage and I%26#039;ve seen Earned Income Tax Credit multiple times but can%26#039;t quite comprehend what it IS exactly.

And while I%26#039;m on the topic, can anyone describe any other alternative solutions in lieu of hiking up the minimum wage to me? I%26#039;m trying to prepare for a debate and economics really isn%26#039;t my forte.

What exactly is Earned Income Tax Credit?

A tax credit is a dollar-for-dollar reduction in your taxes. So I calculate that I would owe $1000 in incomes taxes, but then I realize I can claim a $200 tax credit, that means I only owe $800 in income taxes.

Now, the earned income tax credit is available to certain low-income households, as a means to reduce their tax burden. In fact, thanks to the IEC, someone might get a %26quot;refund%26quot; from the IRS, even though they paid no income taxes at all.

Your tax form starts out by giving you a standard deduction and exemptions for yourself and dependents before actual taxation kicks in. This means that the first block of income you make is not taxed, and after that the initial tax bracket is only 10%. So a low income worker or a part time worker may have paid little or no actual income tax, but still qualify for the EIC tax credit and get money %26quot;back%26quot;.

The idea behind THAT is to provide some relief for the burden of social security taxes. Despite what I said above, workers pay 7.5% social security tax from dollar one. So even the lowest-paid workers are paying at least that 7.5% payroll tax. The EIC is largely meant to offset that.

What exactly is Earned Income Tax Credit?

EIC is money the government pays to you for working when you don%26#039;t make over a certain amount. It was to aid families that the worker makes the minimum wage.....And to get people off welfare and into the work force......I went on disability and my wife worked while I was awaiting SSI and we drew EIC because she didn%26#039;t make very much.......#######

What exactly is Earned Income Tax Credit?

Check out the Wikipedia%26#039;s discussion of the Earned Income Tax Credit.

What exactly is Earned Income Tax Credit?

Earned income credit was created for single parents who file as head of household it allows them to (provided their income is low enough) actually get back more than they paid in federal income tax.

The main agrument for not rasing the minimum wage is that most people aready make more than that and the jobs that would be effected would simply result in higher prices when that cost is passed along to consumers making it harder for lower income individuals to get by.

Good Luck

What exactly is Earned Income Tax Credit?

EIC is a form of socialist wealth redistribution

it rewards people who will not or cannot earn enough money to support themselves and their multiple children by giving them a large tax return

for example

last year I earned 71000 usd

my neighbor earned 14000usd

we both are married and have 2 children

i had a tax liability of 4000 and paid thru the year about 4500

which gave me a refund of 500

he had a liability of 0 and paid in 1200

he got a refund of 5000

(this is an example I know the numbers are not exact)