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State and Local Tax

Earned Income Tax Credits: Employee Notification Requirements

James Paille  

James Paille  

In 2011, the federal government stopped the Advance Earned Income Tax Credits (AEITC) program. Today, earned income tax credits (EITC) still exist, but on a 1040 personal tax return level only.

Some states have state EITC, and seven states and one city have earned income tax credits that have employee notification requirements. These states require employers to provide a separate EITC state notice, as well as the federal notice requirement.

Here is a breakdown of the requirements by state.

California

Notice must be given with W-2, or within one week before or one week after the W-2 is provided. Sample notice can be downloaded at http://www.edd.ca.gov/payroll_taxes/pdf/EarnedIncomeTaxCredit.pdf

Illinois 

Notice must be given with W-2, or within one week before or one week after the W-2 is provided. Additionally, the notice must be updated annually to reflect the proper dollar amounts. Sample notice can be downloaded at:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2416&ChapterID=68

Louisiana

Any business with 20 or more full-time or part-time employees must provide the state EITC notice at time of hire. The 2014 notice can be in the form of a poster, and the poster can be downloaded at:

http://www.laworks.net/Downloads/Posters/2014_Earned_Income_Credit.pdf  – English

http://www.laworks.net/Downloads/Posters/SPN_2014_Earned_Income_Credit.pdf – Spanish

Maryland 

Employers are required to provide a notice to all employees by December 31 of each calendar year. Employers can produce their own notice or use the state sample that is available for download at:

http://taxes.marylandtaxes.com/Business_Taxes/Business_Tax_Types/Income_Tax/Employer_Withholding/Withholding_Information/Earned_Income_Tax_Credit_Information_Requirement.shtml

New Jersey

The state EITC notice must be given to potentially eligible employees between January 1 and February 15 each year. A sample state notice is available at:

http://www.state.nj.us/treasury/taxation/pdf/eitcstatement.pdf

Texas

Employers must provide employees with the state EITC notice no later than March 1 of each year. The Texas website that contains detailed instructions is at:

http://www.twc.state.tx.us/customers/bemp/earned-income-tax-credit-notification.html

Virginia

Employers are required to post the state EITC notice in the same location as other mandated posters. The state poster in both English and Spanish is available for download at:

http://www.dss.virginia.gov/community/eitc.cgi

Philadelphia

As of January 1, 2015, the city of Philadelphia is now requiring that all employers give an EITC notice to all Philadelphia resident employees. Philadelphia offers a sample notice in both English and Spanish. The notice is required to be provided at the same time W-2s are distributed. The notice can be provided electronically and is available at:

http://www.phila.gov/revenue/eitc/Pages/default.aspx

Be on the lookout for more states and local jurisdictions requiring notices in the future.

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