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Earned Income Tax Credit


The Earned Income Tax Credit (EITC), also known as the Earned Income Credit (EIC), provides a wage supplement to low-income working families and individuals. It is a refundable tax credit that offsets income taxes owed by low income workers and, if the credit exceeds the amount of taxes owed, provides a lump sum payment to those who qualify.

At an annual cost of $30.4 billion (FY 2000), it is today one of the largest federal anti-poverty programs. In 1998, the last year for which data is available, the EITC was claimed by an estimated 19.4 million people and lifted 4.8 million people out of poverty, including 2.6 million children.

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