A Refundable Tax Credit
The Earned Income Credit (EIC) is a refundable tax credit available to eligible taxpayers who do not earn high incomes. The purpose of the EIC is to reduce the tax burden and supplement the wages of working families whose earnings are less than the maximum for their filing status. Taxpayers who qualify for this credit can receive a refund even if they have no filing requirement, owe no tax, and had no income tax withheld.
The EIC is a valuable credit that is adjusted for inflation every year. It was expanded to allow families to claim credit for three or more children.