Description
Earned Income Tax Credit (EITC) Employee Notice – Bilingual
Help employees learn about a valuable federal tax benefit with the Earned Income Tax Credit (EITC) Employee Notice. This 11 x 17-inch bilingual workplace poster provides employees with information about the federal Earned Income Tax Credit and reminds potentially eligible workers to determine whether they qualify when filing their federal income tax return.
The Earned Income Tax Credit is a refundable federal tax credit for eligible low- to moderate-income workers and families. The amount of the credit depends on factors including earned income, adjusted gross income, filing status, and the number of qualifying children claimed.
What Is the Earned Income Tax Credit?
The Earned Income Tax Credit (EITC), also called the Earned Income Credit (EIC), is a federal tax credit available to certain eligible workers and families with earned income.
The EITC can reduce the amount of federal income tax an eligible taxpayer owes. Because the EITC is refundable, an eligible taxpayer may also receive a refund when the credit exceeds the amount of federal income tax owed, subject to applicable federal tax rules.
Who May Qualify for the EITC?
Eligibility for the Earned Income Tax Credit depends on several requirements established by federal tax law.
Depending on the tax year and individual circumstances, eligibility can depend on factors including:
- Earned income
- Adjusted gross income
- Filing status
- Investment income
- Number of qualifying children
- Age requirements when claiming the credit without a qualifying child
- Social Security number requirements
- Residency and other federal tax requirements
Can You Qualify for the EITC Without Children?
Yes. An eligible worker does not necessarily need to have a qualifying child to receive the federal Earned Income Tax Credit.
Federal tax law provides an EITC for certain eligible workers without qualifying children as well as potentially larger credits for eligible taxpayers with one, two, or three or more qualifying children.
Workers should review the requirements for the applicable tax year because income limits, age requirements, and maximum credit amounts can change annually.
What Counts as Earned Income?
Earned income generally includes taxable income received from working for an employer or operating a business or farm.
Depending on the circumstances, earned income can include:
- Wages
- Salaries
- Tips
- Other taxable employee compensation
- Net earnings from self-employment
- Certain other income treated as earned income under federal tax rules
How Much Is the Earned Income Tax Credit?
The amount of the EITC changes based on the applicable tax year and the taxpayer's individual circumstances.
The credit generally varies based on:
- Earned income
- Adjusted gross income
- Filing status
- Number of qualifying children
Because EITC income limits and maximum credit amounts are adjusted periodically, employees should use current Internal Revenue Service information for the tax year being filed rather than relying on older income or credit amounts.
What Is a Qualifying Child for EITC Purposes?
A child must satisfy applicable federal requirements to be treated as a qualifying child for purposes of the Earned Income Tax Credit.
Eligibility can depend on factors involving the child's relationship to the taxpayer, age, residency, Social Security number, and other federal tax requirements.
Taxpayers should review current IRS eligibility rules when determining whether a child qualifies for the credit.
Employer EITC Notification Requirements
Federal tax rules require employers to notify certain employees who have no federal income tax withheld that they may be able to claim a tax refund because of the Earned Income Tax Credit.
Employers can satisfy the federal EITC notification requirement through approved methods such as:
- Providing the required EITC notice on Form W-2 or an applicable substitute Form W-2
- Providing IRS Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit
- Providing an employer statement containing the required IRS wording
Employers should follow current IRS requirements when determining which employees must receive the notice and how the notification requirement will be satisfied.
Is an EITC Workplace Poster Federally Required?
Federal law requires certain employee EITC notifications, but it does not generally require every employer to physically display this particular workplace poster.
This Earned Income Tax Credit Employee Notice is a supplemental employee-awareness resource that can help employers communicate information about the credit to their workforce.
Displaying this poster does not replace an employer's obligation to provide any individual EITC notification required by current IRS rules unless the method used satisfies the applicable federal notification requirements.
State and Local Earned Income Tax Credits
In addition to the federal EITC, many states and some local jurisdictions provide their own earned income tax credits.
State and local credits can have different eligibility requirements, credit amounts, refundability rules, and employer-notification requirements. Employers should review the requirements applicable to each workplace location.
How Can Employees Determine if They Qualify?
Employees can review current eligibility information from the Internal Revenue Service and use the IRS EITC Assistant to help determine whether they may qualify for the Earned Income Tax Credit.
Employees should use information for the tax year they are filing because income limits, maximum credit amounts, and other eligibility requirements can change from year to year.
Why Display an EITC Poster in the Workplace?
Some eligible taxpayers may not realize they qualify for the Earned Income Tax Credit, particularly workers who do not have qualifying children or workers whose income or family circumstances have changed.
Displaying EITC information in employee areas can help increase awareness of the credit and encourage potentially eligible workers to review current IRS eligibility requirements when preparing their federal income tax returns.
Where Can an EITC Poster Be Displayed?
The Earned Income Tax Credit Employee Notice can be displayed in conspicuous employee areas such as:
- Employee break rooms
- Payroll areas
- Human Resources offices
- Employee bulletin boards
- Time-clock areas
- Employee entrances
- Other locations where employee notices are customarily displayed
Earned Income Tax Credit Poster Specifications
- 11"W x 17"H
- Portrait orientation
- Bilingual employee notice
- Printed in full color
- Laminated with high-quality laminate
- Federal tax credit employee-awareness resource
Federal Workplace Posting and Compliance Resources
Labor Law Compliance Center provides employers with federal and state labor law posters, employee notices, workplace policy posters, specialty postings, and compliance resources throughout the United States. Browse our Federal Specialty Posters for additional federal workplace and employee-awareness notices.
