Who primarily benefits from the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) is specifically designed to benefit low- to moderate-income working families. This refundable tax credit aims to reduce poverty and incentivize employment among those who are working but still earning low wages. By providing financial support, the EITC helps these families with essential costs, such as food, healthcare, and education, thereby improving their overall quality of life.

The structure of the EITC means that it gradually increases as income rises, up to a certain threshold, and then phases out at higher income levels. This feature encourages individuals to seek employment or increase their working hours, as it directly supports their financial situation without serving as a disincentive to work.

Other options describe groups that do not primarily receive benefits from the EITC. High-income individuals do not qualify for the credit due to their income exceeding the eligibility limits. Retired individuals generally do not benefit from the EITC as it is intended for those who have earned income through employment. Corporations, regardless of their size, do not directly receive this tax credit, which is meant for individual workers rather than businesses.