The Advance Earned Income Credit is a program that allows people who qualify for the Earned Income Tax Credit to receive part of the credit in each paycheck during the year the taxpayer qualifies for the credit, according to IRS.gov.
Earned Income Tax Credit
The Earned Income Tax Credit is a deduction that low-income workers can claim on their taxes. It lowers the amount of tax you owe to offset increased living expenses, according to WorldWideWeb Tax.
With the Advance Earned Income Tax Credit, more money is added to the net pay of your paycheck for each pay period, according to Payroll.intuit.com.
The extra money is like a small tax refund with every paycheck. The money comes from your withheld income tax, social security and Medicare taxes, according to intuit.com.
Payments from the Advanced Earned Income Tax Credit are not considered wages. You will not have to pay any additional tax on this income, according to intuit.com
To qualify for the Advanced Earned Income Tax Credit, you must have a job, have at least one child, and qualify for the Earned Income Tax Credit, according to IRS.gov.