State EITC Notice Requirements - Advanced EITC Elimination

With the elimination of the Advanced Earned Income Tax Credit (EITC), states are announcing how employers are to proceed with notifying employees about the advance payment in those states.  In the past employers were required to notify all employee’s who qualified for this tax reduction at the end of each year and allow the employee an opportunity to complete a Form W-5 to receive this benefit.  However, some states have their own EITC taxes and also have the Federal EITC tax documented in their law to notify employees.

California EITC Requirements

California announced all employees that may be eligible for Federal EITC must still be notified within one week before or after providing the Form W-2.  A sample notice has been provided on the Employment Development Department (EDD) website.

Illinois EITC Requirements

Illinois announced the same rules as California, but they must also provide the IRS Notice 797 to the employee.  They too have a sample notice that may be used at www.ilga.gov.

Lousiana EITC Requirements

Louisiana announced employers with 20 or more employees whose anticipated wages are $43,000 or less per year must receive a written notice from the IRS or from the Louisiana Workforce Commission upon hiring the employee.  The same notice(s) must be posted along with other required state and federal notices required by law in the employer’s place of business.

New Jersey EITC Requirements

New Jersey announced employers must continue to provide notice of EITC eligibility to employees for both Federal and State EITC when the Form W-2 is provided, between January 1 and February 15 of each year.  The written notice must use the statement developed by the New Jersey State Treasurer.

Texas EITC Requirements

Texas must provide the EITC eligibility by March 1 of each year to all employees regarding eligibility requirements in 1 of 4 methods.  See the Texas Comptroller of Public Accounts website.

Virginia must post any notice by the Virginia Department of Social Services (DSS) informing employees they may be eligible for the federal and Virginia EITC and posted in a location where other required notices are posted.  Visit the Virginia DSS for information on these notices.

Sherry Dwyer, CPP
Software Support Manager

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