Final answer:
The Earned Income Credit (EITC) for Samuel and Annamaria for the year 2023 cannot be calculated without the specific tax tables for that year, which indicate the phase-in and phase-out of the credit based on income and the number of children.
Step-by-step explanation:
The Earned Income Credit (EIC or EITC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The purpose of the EITC is to reduce the tax burden on eligible workers and supplement wages. For a couple with three qualifying children in 2023, the maximum EITC amount they could receive is not specified in the provided texts; nonetheless, the EITC amount is influenced by their income and the number of children. The exact amount of EITC for Samuel and Annamaria cannot be determined without the specific tax tables for 2023, which are published annually by the IRS. These tax tables would detail the phase-in and phase-out rates of the credit based on their income and number of children.
In general, the EITC works such that as a family's income begins to increase, the EITC amount initially grows until it reaches a certain plateau. Once the income exceeds a threshold, the EITC starts to phase out, meaning the credit's amount is gradually reduced as income continues to rise until it eventually reduces to zero at a certain income level. This design is aimed to avoid the so-called poverty trap, where an increase in income could lead to an equivalent loss in government support, making work less attractive. While actual amounts and income thresholds change year to year, the provision of EITC acts as a strong work incentive without suddenly cutting off benefits and disincentivizing higher earnings.