A new law that goes into effect on Jan. 1, 2008, requires employers to provide a new notice to employees, along with annual wage summaries (such as W-2 or 1099 forms). The measure, A.B. 650, requires all California employers to give all employees written notice of employees’ possible right to take an Earned Income Tax Credit on their federal tax returns.
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The notice must be hand delivered or mailed to employees within one week before or after, or at the same time, W-2 or 1099 forms are delivered. Note that employers cannot satisfy the new notice requirement simply by posting the notice on an employee bulletin board or delivering it through interoffice mail.
The notice must contain the following language:
BASED ON YOUR ANNUAL EARNINGS, YOU MAY BE ELIGIBLE TO RECEIVE THE
EARNED INCOME TAX CREDIT FROM THE FEDERAL GOVERNMENT. THE EARNED
INCOME TAX CREDIT IS A REFUNDABLE FEDERAL INCOME TAX CREDIT FOR
LOW-INCOME WORKING INDIVIDUALS AND FAMILIES. THE EARNED INCOME TAX
CREDIT HAS NO EFFECT ON CERTAIN WELFARE BENEFITS. IN MOST CASES,
EARNED INCOME TAX CREDIT PAYMENTS WILL NOT BE USED TO DETERMINE
ELIGIBILITY FOR MEDICAID, SUPPLEMENTAL SECURITY INCOME, FOOD STAMPS,
LOW-INCOME HOUSING OR MOST TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
PAYMENTS. EVEN IF YOU DO NOT OWE FEDERAL TAXES, YOU MUST FILE A TAX
RETURN TO RECEIVE THE EARNED INCOME TAX CREDIT. BE SURE TO FILL OUT
THE EARNED INCOME TAX CREDIT FORM IN THE FEDERAL INCOME TAX RETURN
BOOKLET. FOR INFORMATION REGARDING YOUR ELIGIBILITY TO RECEIVE THE
EARNED INCOME TAX CREDIT, INCLUDING INFORMATION ON HOW TO OBTAIN THE
IRS NOTICE 797 OR FORM W-5, OR ANY OTHER NECESSARY FORMS AND
INSTRUCTIONS, CONTACT THE INTERNAL REVENUE SERVICE BY CALLING
1-800-829-3676 OR THROUGH ITS WEB SITE AT WWW.IRS.GOV.
Additional Resource: