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The Hows of Taxes

Module 11: Earned Income Credit


A cook preparing a meal.
A tax credit is a dollar-for-dollar reduction of the tax. The earned income credit is a refundable tax credit for certain people who work and whose earned income and AGI are under a specific limit. Many rules apply to the earned income credit. Generally, the taxpayer's earned income, filing status, and number of qualifying children, if any, determine the credit. The earned income credit reduces the tax. Eligible taxpayers can receive the earned income credit even if their tax is zero. This makes it a refundable credit.


skill check:
Check your understanding of the earned income credit. Indicate whether each of the statements below is true or false by clicking on the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.
  1. A tax credit is a dollar-for-dollar reduction of the tax.
  • A.
  • B.
  1. All taxpayers with children can claim the earned income credit.
  • A.
  • B.
  1. For the earned income credit, a child can be claimed as a qualifying child on more than one tax return.
  • A.
  • B.

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