State Agencies Bulletin No. 344

Advance Payment of Earned Income Credit
Date Issued
October 30, 2002


To explain the procedure for the annual review of employees with Earned Income Credit (EIC).

Affected Employees

Employees eligible to receive advance Earned Income Credit payments for 2003.


Internal Revenue Regulations require employees eligible for advance payment of Earned Income Credit to file a new W-5 "Earned Income Credit Advance" certificate each year.

The federal government provides a credit or an income tax refund to employees who earn low or modest wages if they meet eligibility requirements relating to their annual income and family size. Eligible employees have the option of receiving advance payments of earned income credit directly from their employer in the form of regular EIC payments added to the wages in their paychecks.

Agency Actions

Report (TAX113) identifying employees in your agency currently claiming Earned Income Credit is available in Reveal. This report identifies employees that must have their federal tax records changed if a new W-5 is not filed.

If you have not received a new W-5 by December 31, 2002 for an employee on this report, the EIC must be canceled on the Employee Tax Data panel effective with the first payroll check for 2003.


Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.