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Date: December 2, 2008
Bulletin Number: 864
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Subject

Advance Earned Income Credit Payment

Purpose
To provide agencies with instructions for the review of employees with Earned Income Credit (EIC) for the current tax year (2008) and to provide the requirements for tax year 2009.

Affected Employees

Employees who are eligible to receive advance Earned Income Credit payments for 2008 and completed a Form W-5 (Earned Income Credit Advance Payment Certificate).

Background
 

According to IRS Rules and Regulations, Earned Income Credit (EIC) is a credit that reduces the tax owed for certain workers.  Employees who expect to be eligible for Earned Income Credit (EIC) and expect to have a qualifying child are entitled to receive EIC payments included in their paycheck.  These employees are required to file a new Form W-5 each year. For additional information, please refer to IRS Publication 15 and/or instructions for Form W-5.

Effective Dates

Institution paychecks dated December 31, 2008.
Administration paychecks dated January 7, 2009.

OSC Actions
OSC has created Control-D report TAX113 (Reset W-5 EIC Employees).  The report identifies employees who currently claim EIC according to agency.

Agency Actions

Agencies must review the Control-D report and request a new Form W-5 from all employees appearing on the report. The new form must be received on or before December 18, 2008 for Institution agencies and December 24, 2008 for Administration agencies.

If a new Form W-5 is not received by the dates mentioned, agencies must update the employee Federal Tax Data page as follows:

Home>Compensate Employees>Maintain Payroll Data (US)>Use>Employee Tax Data
  • Select the Federal Tax Data page
  • Insert a new effective dated row
  • Under the Earned Income Credit field, click the “Non applicable” radio button
  • Save the page
Questions
Questions may be e-mailed to the Payroll Deductions mailbox.