The Earned Income Credit (EIC) is a tax benefit designed to help low to moderate-income workers by reducing the amount of tax owed and potentially providing a refund. This credit encourages and rewards work by allowing eligible individuals to receive a significant financial boost, particularly benefiting families with children. It connects closely with the tax formula by affecting tax liability calculations, influences which tax forms are used to claim it, and interacts within the structure of the progressive tax system, where those with lower incomes can receive larger refunds.
congrats on reading the definition of Earned Income Credit. now let's actually learn it.