Earned Income Tax Credit (EITC)
Department of the Treasury
The Earned Income Tax Credit (EITC) provides a tax break to low and moderate income Americans who work. For fiscal year 2015, more than 27 million taxpayers received more than $66 billion in EITC, making the credit one of the largest anti-poverty programs in the country. For Tax Year 2014, the maximum credit was $6,143 for a family with three or more qualifying children. Unlike other traditional benefit programs, tax filers claim the EITC on their tax returns, without a pre-approval process.
Agency Accountable Official: Dorrice Roth, Acting Chief Financial Officer, U.S. Department of the Treasury
Program Accountable Official: Jeffrey Tribiano, Deputy Commissioner for Operations Support, Internal Revenue Service
The current improper payment rate for EITC, for fiscal year 2015, is estimated to be 23.8% (between 21.6% and 25.9%) of all program payments – roughly $15 6 billion. The primary source for this estimate is the IRS's National Research Program study. The study includes audits of a statistically valid subset sample of credit returns to determine accuracy of the claim.A number of factors unique to the EITC program trigger errors. The complexity of the law contributes to confusion around eligibility requirements, mainly qualifying child relationship and residency rules. Other factors include high program turnover of one-third annually, return preparer errors, and fraud. Read More...