What Is the Earned Income Tax Credit?
Taxes are a huge burden for Americans of all income levels, but they can be even more problematic for lower earners who need every dollar they can get their hands on. Thankfully, the IRS has made one extremely lucrative tax credit available to low-income households. It's called the Earned Income Tax Credit, or EITC, and it could put serious cash back in your pocket.
A tax credit is a dollar-for-dollar reduction of your tax liability. If you owe the IRS $1,000 and claim a $1,000 tax credit, you wipe out that $1,000 you owe. Some tax credits are non-refundable, so the most they can do is reduce your tax liability to $0. But refundable tax credits will pay you money even if you owe nothing.
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Source Fool.com
