Asked by Misty Shonkwiler on Jul 01, 2024
Verified
A taxpayer may become ineligible for earned income credit if he/she has excessive disqualified income such as dividends or interest.
Earned Income Credit
The Earned Income Credit (EIC or EITC) is a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children, to reduce the amount of tax owed and potentially return a portion of their earned income.
Disqualified Income
Types of income that cannot be considered or used for certain applications or benefits, as defined by specific rules or guidelines.
Dividends
Payments made by a corporation to its shareholder members, representing a portion of the corporate profits.
- Detail the conditions requisite for access to the earned income credit and the manner in which it is recalibrated for inflation.
Verified Answer
JR
Juancho ReynalJul 02, 2024
Final Answer :
True
Explanation :
This statement is true. If a taxpayer has excessive disqualified income, such as investment income from dividends or interest, they may no longer qualify for the earned income credit.
Learning Objectives
- Detail the conditions requisite for access to the earned income credit and the manner in which it is recalibrated for inflation.