The Earned Income Credit (EIC) is a refundable tax credit that has a significant impact on United States revenue. In fact, EIC claims in any year generally total more than $60 billion.
EIC claims are also increasing in both number and amount. In the ten-year period ending in 2010, the number of EIC claims increased from 19.6 million to 27.4 million, an increase of 39.8%. Not only had the number of claims for EIC increased over the period, the average credit per family also increased by 28.8%, from $1,704 at the beginning of the period to $2,194 in the year the 10-year period ended. The combination of an increased number of EIC claims coupled with an increase in the average credit caused the total amount of EIC claimed to skyrocket by 82.3% over the period from $33.4 billion to $60.9 billion.
In a recent year, 147.4 million individual federal tax returns were filed, and 24.4 million—16.6% of individual taxpayers—claimed the Earned Income Credit. Based on that percentage, it would not be unexpected that approximately one taxpayer in every six may claim the EIC.
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