MinhT1
Expert Alumni

Retirement tax questions

As you add income, some income-based credits such as the Earned income credit could decrease, which could give you the impression of a higher marginal tax rate.

 

The Earned Income Tax credit (EITC) is a bell shaped curve against income. The EITC rises with income until a certain level of income when it starts to decrease to reach 0 at the maximum level of income for the category.

 

As an example, please look at the EITC tables from page 33 of this IRS publication.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"