# Earned Income Tax Credit

*Taxes — Finicade finance glossary*

The EITC is a refundable credit for low and moderate earners, scaled by income and number of children. Its structure has three phases: it rises with earnings, plateaus, then phases out. That phase-out creates a high implicit marginal tax rate on the way down — losing benefits as income rises acts exactly like a tax — which is a recurring design problem across means-tested programmes.

**Also known as:** EITC, earned income credit, working tax credit

**Related terms:** [Refundable Tax Credit](https://finicade.com/glossary/refundable-tax-credit), [Tax Credit](https://finicade.com/glossary/tax-credit), [Child Tax Credit](https://finicade.com/glossary/child-tax-credit), [Marginal Tax Rate](https://finicade.com/glossary/marginal-tax-rate), [Dependent](https://finicade.com/glossary/dependent)

Source: https://finicade.com/glossary/earned-income-tax-credit