What is the name of the credit that can be given to low-income workers?

Study for the Liberty Tax School Test with flashcards and multiple choice questions. Each question includes hints and explanations to help you understand. Prepare effortlessly and excel in your exam!

The correct answer is the Earned Income Credit (EIC), which is designed specifically to assist low-income workers and their families. This credit aims to reduce poverty and incentivize employment by providing financial support to those who are earning income below a certain threshold.

The EIC is particularly beneficial because it not only lowers the tax liability of eligible workers but can also result in a refund if the credit exceeds the amount of taxes owed. Eligibility for this credit depends on various factors, including income level, filing status, and the number of qualifying children.

In contrast, the other options do not specifically target low-income workers in the same way. Income tax credits can refer to various types of credits without the specific focus on low-income earners, tax relief credits may encompass a broader range of tax reductions for multiple situations rather than solely for low-income individuals, and social security credits are related to individuals' work history and eligibility for social security benefits, not direct financial assistance for low-income workers. Thus, the EIC is uniquely tailored to support low-income individuals and families, making it the correct choice in this context.

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