What exactly is the low income tax credit, and how does this work?

Answer 1

The credit you are referring to is called the Earned Income Tax Credit. The best place to figure out if you qualify for the credit is on the IRS web site. They have a page where you can determine if you are eligible and what amount your credit would be. (See the link below)

Answer 2

It's Earned Income Tax Credit, and is intended to reimburse low and lower-mid income working people for part or all of what they pay in for social security.

To qualify, you have to have earned income that's under around $12K if you have no qualifying children, $32K with one, and $36K if you have more than one. The limits are a little higher for a married couple. Earned income is basically money you get from working. If you don't have a qualifying child, you have to be between ages 25 and 65. There are some additional rules also.

If you qualify, you receive additional money as a refund - the amount depends on your income, your filing status, and whether you have one, more than one, or no qualifying children.

Answer 3

this most often applies to a single parent with a low income, which results in a fairly large credit (and refund) because of that fact. I don't have the guidelines here in front of me, but if you are not working a high paying job and have a child or children and are single, you can expect a large refund.