Asked by Chelsy Martin on Jul 04, 2024
Verified
The earned income credit is adjusted each year for inflation.
Earned Income Credit
A refundable tax credit for low to moderate-income working individuals and families, aimed at decreasing the amount of tax owed and potentially returning money to the taxpayer.
Inflation
The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
- Outline the prerequisites for obtaining the earned income credit and the process by which it is adjusted to reflect inflationary changes.
Verified Answer
AA
arianna amorosoJul 09, 2024
Final Answer :
True
Explanation :
The earned income credit (EIC) is indexed to inflation and is adjusted each year in order to keep pace with the cost of living. This ensures that eligible filers receive an appropriate amount of tax credit based on their income and family size.
Learning Objectives
- Outline the prerequisites for obtaining the earned income credit and the process by which it is adjusted to reflect inflationary changes.