What is the Advance EITC?
The advance EITC allows those taxpayers who expect to qualify for the Earned Income Tax Credit (EITC) and have at least one qualifying child to receive part of the credit in each paycheck during the year the taxpayer qualifies for the credit. Employees can find out if they qualify by answering the questions on form W-5 and then giving the completed form to their employers, who are required to file the form if the employee qualifies. Employers then add extra money to each paycheck. The Advance EITC is only a partial refund of the full EITC amount tax filers may qualify for, so they will need to file for the balance of their EITC when they file their federal income taxes.
A1. If you expect to claim the Earned Income Tax Credit (EITC) on your next federal tax return and have at least one qualifying child, you may be able to get part of the EITC starting now and throughout the year “in advance” of claiming the EITC on your return. This is called the Advance EITC. With the Advance EITC, you receive a portion of the EITC (that you would normally claim on your return) in your pay throughout the year. And, you can still claim extra EITC on your return. Q2. Why should I he interested in the Advance EITC? A2. This year, you can get up to $1,387 more income in your pay. If you expect that your income for 1999 will he less than S26,928 and you have at least one child living with you in the U.S., the Advance EITC may be for you, and it’s easy to get! Q3. How can I get the Advance EITC payments? A3. First, see if you qualify for the Advance EITC payments by completing the five questions on the back of Form W-5, Earned Income Credit Advance Payment Certificate. You
An employee who expects to be eligible for the Earned Income Tax Credit (EITC) and expects to have a qualified child is entitled to receive EITC payments, called Advance EITC, with his or her pay during the year. The employer adds the EITC payment, up to a maximum of $1,750 (or a maximum of $14.83 per month for 12 months) for 2008, to the employees net pay for the pay period. The employee must fill out an IRS form W-5.
Most workers receive the EITC in one large check from the IRS after they file a tax return. But there is another choice: Employers can add part of a worker’s EITC to every paycheck, and the worker can qualify for the rest of the credit after filing a tax return. This is called “advance EITC payment.” In 1995, advance EITC payments are available to any worker with at least one qualifying child who expects 1995 income of less than approximately $24,395. The new credit for workers who are not raising children in their home is not available in advance payments. What Are the Advantages of the Advance EITC? For many workers, getting part of their EITC in each paycheck can make a difference in paying the rent, buying groceries, and meeting other day-to-day needs. A worker earning between $650 and $915 a month can get about $50 extra in each biweekly paycheck. Employers also benefit from promoting advance EITC payments – they can help employees increase their take-home pay at no cost to the bu
The Advance Earned Income Tax Credit (AEITC) allows some tax payers to receive some of their EITC refund in their paychecks and then the rest when they get their tax refund, rather than as one lump sum. For those that qualify (meaning that they are eligible for the EITC and have at least one qualifying child), they can receive part of their EITC refund amount in each paycheck during the year that they qualify. In order to receive the advance credit, individuals must fill out a W-5, the Earned Income Credit Advance Payment Certificate. This form is available on the IRS website and/or should be accessible through employers. For more information about the advance EITC, go to http://www.irs.gov/individuals/article/0,,id=96515,00.html.
