Earned Income Tax Credit (EITC)
The following are informational items are available from IRS for employers:
- Notice 1015, Have
You Told Your Employees About the Earned Income Credit (EIC)?, explains
the requirement for employers to notify their employees about the EITC.
- Notice 797, Possible
Federal Tax Refund Due to the Earned Income Credit (EIC), is a payroll
stuffer which employers may use to notify their employees about the EITC.
- Notice 962, The Tax Break for Hard Working People, is a payroll
stuffer about the EITC. This Notice is too large for download. You can order
paper copies by calling 1-800-829-3676.
Advance Earned Income Tax Credit
Are you interested in providing your employees the benefit of increased take
home pay at virtually no cost to your enterprise? The Internal Revenue Service
(IRS) has a program called the Advance Earned Income Tax Credit (Advance EITC)
that does just that. Employees can get extra money in their paychecks rather
than having to wait until they file their tax return.
This is how it works. You make the advance payments to your employees from
the employment taxes you would normally deposit or send to the IRS. The amount
is paid to the employees - with no income tax withheld. You then claim the
amount as a timely payment on your quarterly employment tax form (Form 941).
Signing up for the Advance EITC payment is easy. All your employees need to
do is give you a Form
W-5, Earned Income Credit Advance Payment Certificate. You do not
need to send Form W-5 to IRS. Just keep the form on file.
Over 15 million workers may qualify for this paycheck "boost." To
qualify for Advance EITC, working parents or grandparents must have at least one
qualifying child and their annual income for 2000 must be less than
approximately $27,000, or less than approximately $31,000 with two or more
qualifying children. For many workers receiving the Advance EITC each paycheck
can make a difference in buying groceries, paying rent, and meeting other daily
needs. For example, an employee who earns minimum wage would see their take home
pay increased by over $100 each month!
Earned Income Tax Credit | 1999 Tax Year Archives | Tax Help Archives | Home
