Registered Tax Return Preparer RTRP Practice Exam

Question: 1 / 400

What does the acronym EITC stand for in tax terms?

Earned Incentive Tax Credit

Employment Impact Tax Credit

Earned Income Tax Credit

The acronym EITC stands for Earned Income Tax Credit. This credit is designed to benefit low to moderate-income working individuals and families, particularly those with children. The Earned Income Tax Credit reduces the amount of tax owed and may also provide a refund to the taxpayer if the credit exceeds the total tax liability. The primary goal of the EITC is to encourage and reward work while also helping to alleviate poverty by supplementing the earnings of those who qualify.

For further context, the other options do not represent the EITC, which is specifically linked to earned income and structured to provide financial assistance based on income levels and dependents.

Get further explanation with Examzify DeepDiveBeta

Economic Incentive Tax Credit

Next Question

Report this question

Download Registered Tax Return Preparer RTRP Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy