Final answer:
The subject of this question is Business and the grade level is High School. Within the Internal Revenue Code (IRC), there are many tax credits designed to reduce taxpayers’ taxes and provide incentives for taxpayers to help the economy. One example of a tax credit is the Earned Income Tax Credit (EITC), which is a method of assisting the working poor through the tax system.
Step-by-step explanation:
The subject of this question is Business and the grade level is High School. Within the Internal Revenue Code (IRC), there are many tax credits designed to reduce taxpayers’ taxes and provide incentives for taxpayers to help the economy. One example of a tax credit is the Earned Income Tax Credit (EITC), which is a method of assisting the working poor through the tax system. The EITC is one of the largest assistance programs for low-income groups, and it provides a tax break that increases with the amount of income earned. For example, a single parent with two children could receive a tax credit of $5,372 up to a certain income level. The earned income tax credit is popular because it effectively increases the payment received for work and encourages families to work more. However, as families earn above the poverty level, the credit is gradually reduced, which can act as a partial disincentive to work for those near-poor families.