PaymentAccuracy.gov

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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 2014, more than 27.7 million taxpayers received about $66.3 billion in EITC, making the credit one of the largest anti-poverty programs in the country.  In tax year 2013, the maximum credit was $6,044 for a family with three qualifying children.  EITC beneficiary claims are not pre-certified for eligibility as in other traditional benefit programs.

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

Current

$55.4B

Total Payments (Outlays)more info

$12.6B

Improper Paymentsmore info

22.7%

Improper Payment Ratemore info

2013

23% - 28% Improper Payment Rate Target more info

All amounts are in billions of dollars

Tabular view for Projected improper payments Tabular View   

Program Comments

The current improper payment rate for the EITC, is estimated to be 27% (between 24.9% and 29.4%) of all program payments – roughly $17.7 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...