What is used to offset income and payroll taxes for low-income workers while also providing an incentive to work?

The Earned Income Tax Credit (EITC) is designed specifically to provide financial support to low-income workers while encouraging employment. It reduces the amount of tax owed and can result in a refund, thereby directly benefiting those who meet the income and eligibility requirements. This credit is particularly aimed at families with children, but even individuals without children can qualify if they meet specific criteria.

The EITC is unique in that it not only offsets income taxes but also has the potential to provide significant benefits that help alleviate poverty, reduce reliance on other forms of public assistance, and stimulate economic activity, as recipients tend to spend the additional income. This make-work incentive aims to encourage people to enter or stay in the workforce while also providing them with financial relief.

In contrast, while options like the Child Tax Credit and various education or retirement credits may provide financial benefits, they do not have the same primary goal of incentivizing work among low-income individuals in the same way the EITC does.