Don’t Forget the EITC Notice When Sending W-2s!

By Giuliana Gabriel , J.D, Vice President of Human Resources

You may be preparing to send W-2s out so your employees can file their taxes, but do you have the Earned Income Tax Credit (EITC) Notice on your list? As of last year, employers are now required to notify employees regarding potential EITC eligibility.

EITC Notification Requirement

Employers must notify all employees that they may be eligible for the federal and California EITC. This requirement applies to any California employer that is subject to and required to provide unemployment insurance to its employees under the state’s Unemployment Insurance Code.

Notification Updates

Specifically, the law requires employers to notify all employees that they may be eligible for?VITA,?CalFile, and other state and federal antipoverty tax credits, including the?federal?and the?California EITC. Employers are required to send this notice twice?a year.

1. The first notification must take place within one week before or after, or at the same time when employers provide an annual wage summary, including, but not limited to, a Form W-2 or a Form 1099, to any worker.
2. Employers also need to send a?second notification?to all employees during March of the same year.

How to Deliver the Notices

Employers may provide these notifications by handing them directly to employees or mailing them to the employee’s last known address.?However, employers will not be in compliance by simply posting a notice on an employee bulletin board or sending it through office mail.

To send the notification via email, the employer must send the notice to an email account of the employee’s choosing in PDF, JPEG, or other digital image file type format, only if an employee affirmatively, and in writing or by electronic acknowledgment, opts into receipt of electronic statements or materials.

CEA Members can access a Sample EITC Notice by logging into our website and choosing the HR forms page.

Questions? Call us at 800.399.5331 or?[email protected]