Which of the following is true of refundable tax credits?

Question

Quizplus · Accepted Answer

Refundable tax credits, such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), are designed to provide additional financial support to low-earning households. These credits often result in an increase in the number of low-earning households filing tax returns in order to receive the credit, as they may not have otherwise been required to file. Therefore, option D is the correct answer. Options A and B are incorrect as there is no evidence to suggest that refundable tax credits have led to a decrease in tax filings. Option C is also incorrect as it is factually incorrect- EITC is a refundable tax credit that is aimed at low-earning households.

Which of the Following Is True of Refundable Tax Credits