Join the IRS for EITC Awareness Day, January 27, 2017! Each year, IRS joins partners nationwide to launch the EITC Awareness Day outreach campaign to ensure that millions of low-and moderate-income workers get the credit they deserve and get it right. The IRS invites community organizations, elected officials, state and local governments, schools, employers, and other interested parties to join a national grassroots effort on EITC Awareness Day to spotlight EITC. Please click here for additional information.
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 following jurisdictions are required to notify employees about the earned income tax credit law in these jurisdictions.
California. Effective January 1, 2008, all employers are required to notify all of their employees of the federal Earned Income Tax Credit (EITC). Assembly Bill 650, Chapter 606 (Lieu and Jones) requires any employer who is subject to, and is required to provide unemployment insurance to employees, to notify all employees that they may be eligible for the EITC. Employers shall give notification within one week before or after, or at the same time, they provide employees with an annual wage summary (IRS Form W-2, 1099). You must provide notification to your employees by either handing it directly to your employee or mailing it to your employee's last known address. Posting of this information on an employee bulletin board will not satisfy the notification requirement. The notification shall include instructions on how to obtain any notices available from the Internal Revenue Service for this purpose, including, but not limited to, the IRS Notice 797 or any successor notice or form, or any notice created by you, as long as it contains substantially the same language as the notice below. For a sample notice please click here.
For additional information on the California requirements please click here.
Illinois. An employer is required to notify all employees that may be eligible for the federal earned income tax credit and may apply for the credit on their tax returns. The employer is not required to notify any employee who receives gross wages from the employer that exceed the maximum amount that may qualify for the federal earned income tax credit. The employer is to provide the notification by giving or mailing it to the employee. The notice should include any notice available from the Internal Revenue Service or if created by the employer it should contain the same language. The notice must be provided within one week before or after or at the same time that the employer provides a Form W-2 to the employee.
For additional information on the Illinois requirements please click here.
Louisiana. Requires a business establishment with 20 or more employees to notify new employees, whose anticipated wages are $46,000 or less per year that they may be eligible for the earned income tax credit. The employer must provide the written notice from the IRS or the Louisiana Workforce Commission at the time of hiring. This information must also be posted with other notices required by state and federal law.
For additional information on the Louisiana requirements please click here.
Maryland. Employers are now required, under Tax General Article 10-913, to provide, on or before December 31, each year, electronic or written notice to an employee who may be eligible for the federal and Maryland Earned Income Tax Credit (EITC).
Employees who meet all of the federal requirements may be eligible for a Maryland credit up to half of the federal EITC, but not greater than the state income tax. Additionally, certain employees may also qualify for a refundable Maryland credit, or a local EITC. Employers may choose to notify all of your employees or only those employees with wages less than or equal to the amounts shown above.
For further information about the Maryland EITC, employers should please click here. Maryland can also be contacted directly at 1-800-MD-TAXES (1-800-638-2937) or (410)260-7980 from Central Maryland.
Montgomery County, Maryland. The Earned Income Credit, or EIC, is a credit that is income based and is initiated by filing Maryland income taxes by April 15 of every year. There is a regular State EIC and a Refundable EIC component. If the taxpayer qualifies for the Refundable EIC from the State of Maryland then they will receive an additional payment from Montgomery County. Recipients will get an additional 95% of the State Refundable EIC amount from the County for the tax year 2014. For example, if the State refunds $100 the County will add an additional $95. Both refund checks are mailed separately by the State of Maryland. Starting in tax year 2015, the County match will be 100%.
Questions regarding eligibility for either the State or Montgomery County EIC must be addressed to the State of Maryland Office of the Comptroller at (410)260-7980. Additional information can be obtained here.
New Jersey. Requires all public and private employers to give written notifications to potentially eligible employees of the availability of both the federal and New Jersey earned income tax credits when the employer gives the employee the statements of wages and tax withholding (Form W-2). This notification is to be distributed between January 1 and February 15 of each year to coincide with the employer’s distribution of the Form W-2. The written notification must use the statement developed by the NJ State Treasurer (as provided on the notice in the link below from the New Jersey Department of the Treasury, Division of Taxation). The employer shall notify only those employees whom the employer knows, or reasonably believes, may be eligible for the federal credit based on the wages the employee earned during the prior year as reported on the Form W-2.
For additional information on the New Jersey requirements please click here.
Philadelphia, Pennsylvania. With the passage of Philadelphia Bill No. 140448, signed into law on September 10, 2014, beginning with calendar year 2015 all employers are required to provide employees who reside in Philadelphia with a notice regarding the availability of the federal earned income tax credit (EITC). The written notification that must be given to employees is the "2016 Earned Income Tax Credit ("EITC") Notice".
Employers must provide notification to employees residing in Philadelphia that have taxes withheld. The notification must be provided at the same time that the employee's Form W-2 is given. The notification must also be provided to non-payroll workers residing in Philadelphia that are provided a Form 1099 or equivalent. The notification must be provided with Form 1099.
For additional information please visit the Philadelphia Earned Income Tax Credit Program website here.
Texas. An employer must provide information by March 1 each year to all employees in Texas regarding the general eligibility requirements for the federal EITC. The information must be provided to employees: in person; electronically at the employee’s last known e-mail address; through a flyer included, in writing or electronically, as a payroll stuffer; or by first class mail to the employee’s last known address.
For additional information on the Texas requirements please click here.
Virginia . An employer must post notices about the federal earned income tax credit provided by the Virginia Department of Social Services. The notice may be posted in the same location where other employee notices required by state or federal law are posted.
For additional information on the Virginia requirements please click here.