According to a recent report, for 2013, Taxpayers will be able to apply for a larger earned income tax credit in the tax year as the Internal Revenue Service increased the maximum income used to calculate the credit to account for inflation.
According to the IRS, EITC, or Earned Income Tax Credit, is a benefit for working people who have low to moderate income. The tax credit means more money in the employee’s pocket. It reduces the amount of tax you owe and may also give you a refund. Prior to 2010, qualified employees were able to receive the EITC in advance by calculating the credit due into each paycheck. Much to the relief of payroll administrators, legislation signed into law August of 2010 repealed the Advance EITC and employees could no longer receive it after December 31, 2010.
For taxpayers without children, the maximum EITC increases to $487 from $475 in 2012. For taxpayers with one child, the maximum EITC increases to $3,250 from $3,169. For families with two children, the maximum EITC increases to $5,372 from $5,236.
The maximum credit for families with at least three children increases to $6,044 from $5,891, the report said.