Internal Revenue Service (IRS)
IRS Notification Requirement. Employers will need to notify employees about the IRS Earned Income Credit. IRS Notice 1015, Have You Told Your Employees About the Earned Income Credit (EIC)? explains which employees must be notified and when and how employers must notify their employees about the refundable tax credit.
Employers must give each employee one of the following:
• The IRS Form W-2, Wage and Tax Statement, which has the required information about the EIC on the back of Copy B.
• A substitute Form W-2 with the same EIC information on the back of the employee’s copy that is on Copy B of the IRS Form W-2.
• IRS Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC).
• Your written statement with the same wording as Notice 797.
If you are required to give Form W-2 and do so on time, no further notice is necessary if the Form W-2 has the required information about the EIC on the back of the employee’s copy. If a substitute Form W-2 is given on time but does not have the required information, you must notify the employee within one week of the date the substitute Form W-2 is given. If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date Form W-2 is required to be given.
If an individual qualifies to claim EITC on his or her federal income tax return, they may be eligible for a similar credit on their state or local income tax return.
For more information go to the IRS EITC Central.
State and Local Laws Requiring Earned Income Tax Credit Notification
In addition to the employer requirement to notify employees about the federal Earned Income Credit, employers in the certain jurisdictions are required to notify employees about the earned income tax credit law.