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The United States federal Earned Income Tax Credit (EITC or EIC) is a refundable tax credit designed to encourage low-income workers and offset the burden of U.S. payroll taxes. For tax year 2009, a claimant with one qualifying child can receive a maximum credit of $3,043. A claimant with two qualifying children can receive a maximum credit of $5,028. The credit is expanded for tax year 2009 and 2010. For claimants with three or more qualifying children, the maximum credit is $5,657. Grandparents, aunts, uncles, and siblings can also claim a child as their qualifying child provided they shared residence with the child for more than six months of the tax year. However, in tie-breaker situations in which more than one filer claims the same child, priority will be given to the parent. A foster child also counts provided the child has been officially placed by an agency or court. There is a much more modest EIC for persons and couples without children that reaches a maximum of $438.
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A qualifying child can be up to and including age 18 at the end of the tax year, up to and including age 23 if classified as a full-time student for one long semester or equivalent, or any age if classified as “permanently and totally disabled” (one year or more).[2]

Enacted in 1975, the initially modest EIC has been expanded by tax legislation on a number of occasions, including the more widely-publicized Reagan EIC expansion of 1986. The EIC was further expanded in 1990, 1993, and 2001 regardless of whether the act in general raised taxes (1990, 1993), lowered taxes (2001), or eliminated other deductions and credits (1986). Today, the EITC is one of the largest anti-poverty tools in the United States (despite the fact that most income measures, including the poverty rate, do not account for the credit), and enjoys broad bipartisan support.

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