Khabar 24h SIMPLE EXPLAINERS ON WORLD AFFAIRS, SCIENCE, HEALTH AND MORE.

KHABAR 24H

Simple explainers on world affairs, science, health and more.

All news under one minute

What Happened Today Read in one minute

Earned Income Tax Credit: what it is and why it matters

The Earned Income Tax Credit (EITC) is a refundable US tax credit for low- and middle-income workers and families.

If the credit is larger than the tax owed, the worker receives the difference as a refund. The Additional Child Tax Credit works in a similar way for families.

A proposed draft 2026 IRS Form 1040 would ask filers to state whether they are a US citizen, US national, or an alien lawfully authorized to work in the US.

The Treasury Department says the question will keep ineligible people from claiming these credits. The administration says the change could save taxpayers up to $2 billion.

A research paper estimated 671,000 people, including 309,000 children, would lose the Earned Income Tax Credit under the proposal.

Groups that could lose eligibility include people with DACA status, temporary protected status holders and temporary workers on H-1B visas. The credits aim to reward work and reduce poverty. Economists say refundable credits are among the most effective anti-poverty tools in the US tax code.

Avatar photo
Written by
Khabar 24h Editorial Desk

Khabar 24h Editorial Desk — our explainers are prepared by the Khabar 24h editorial team using AI-assisted research tools, and every piece is reviewed by a human editor before publishing. We do not claim original reporting: our work is turning complex topics into simple, accurate summaries. Spotted an error? Write to contact@khabar24h.com — our corrections policy aims for same-day review.

More from this author →

Leave a Reply

Your email address will not be published. Required fields are marked *