Housing Counselor Certification (HUD) Practice Exam

Which family is most likely to qualify for the Earned Income Tax Credit (EITC)?

1. An individual employed part time in a minimum wage job

2. A family with multiple high-income earners

3. A single parent with two college-aged children

4. A retiree living on a fixed income

The correct answer is: An individual employed part time in a minimum wage job

The Earned Income Tax Credit (EITC) is designed to assist low to moderate-income working individuals and families, particularly those with children. The key eligibility criteria for the EITC include having earned income from employment or self-employment, meeting specific income thresholds that vary depending on the number of qualifying children, and filing a tax return. An individual employed part-time in a minimum wage job is likely to have earned income that qualifies for EITC, assuming that their total income falls within the limits established for eligibility. This type of job typically results in a lower annual income, making it easier for the individual to qualify for the credit. In contrast, families with multiple high-income earners do not meet the income requirements needed to qualify for EITC, as their income would likely exceed the qualifying thresholds. A single parent with two college-aged children may find it more challenging to qualify for EITC compared to one with younger dependents, as the amount of credit decreases or may not be available for children above a certain age. Finally, a retiree living on a fixed income does not typically earn income through employment, thereby disqualifying them from receiving the EITC. Thus, the individual employed part-time in a minimum wage