FEDERAL EARNED INCOME CREDIT (EIC)
Advance Payment of the Earned Income Credit
NOTE: Glossary words appear in blue. Click on any glossary word to see its definition.
Advance payment of the EIC (for workers with a qualifying child)
If you expect to claim the EIC for tax year 2010, you may be able to get advance payments throughout the year instead of waiting until you file your taxes next year and receiving all of your EIC in one payment. This advance on the EIC can be added to your paychecks.
In 2010, a worker can get up to $1830 total in advance EIC payments throughout the year. These advance payments may not represent the entire amount to which you are entitled. If this is the case, you would receive the balance (remainder) you are owed when you file this year’s tax return next April.
Note: This advance is only available to workers who have at least one qualifying child. If you are eligible for the EIC, but do not have a qualifying child, you may not apply for advance payment of EIC.
To apply for advance EIC payments you need to complete Form W-5 (Earned Income Credit Advance Payment Certificate) and give it to your employer:
- You can obtain Form W-5 in PDF file format at the IRS web site: Form W-5.
- Also, your employer may be able to provide you with this form.
(To view the online form, you must have Adobe Acrobat Reader installed on your computer. This is free software that you may download from the Adobe web site.)
Some additional things to know:
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You need to fill out and give to your employer a Form W-5 each year.
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If information related to your eligibility changes in the course of the year, you should fill out a new Form W-5 and give it to your employer.
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If you have more than one employer, only complete one Form W-5.
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If you are married, both you and your spouse can fill out and give to your respective employers separate Form W-5s (there is a place to note this on the form).
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If you receive advance payments of EIC, you must fill out a tax return (even if you would otherwise not have to file) to report the advance payments and claim any additional EIC you might be owed. You need to use Form 1040A or Form 1040 when completing your tax return (Form 1040EZ cannot be used to report advance payments and is not appropriate to use in claiming the EIC if you have one or more qualifying children).
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