What states require employers to submit an EITC notice for employees?

Believe it or not, the IRS and many U.S. states require employers to send notices to certain employees about Earned Income Tax Credit (EITC or EIC) eligibility. This post will cover the basics of the EIC and EIC notices, including Notice 797.

What is the Earned Income Tax Credit?

EIC is a refundable tax credit for taxpayers who meet a specific income bracket to reduce overall liability. It is given to qualifying taxpayers as a credit on their income tax return.

Even if you had no income tax withheld from your wages during the year, a taxpayer may be eligible for the EIC.

What is an EITC notice (Notice 797)?

Employers in certain states are required to send qualifying EIC employees a notice about their eligibility to receive this tax credit. The EITC notice may come in the form of a Form 797 in some states. Notice 797 is a form that informs qualifying taxpayers about their eligibility to claim the federal EIC credit.

Typically, employers in states that require Earned Income Credit notices are required to submit the notification alongside Form W-2. Employers should search for the state required EITC notification. The notification informs employees to see if they are eligible. The following states require EITC notices to be sent to qualifying employees:

California

Send the EITC notice to workers who receive Form W-2 or Form 1099-MISC.

(See the California Year-End Notification Requirements for details.)

Illinois

Illinois employers must give workers who receive Form W-2 or Form 1099-MISC the IRS Notice 797.

(View Illinois Earned Income Tax Credit (EITC).)

Louisiana

Louisiana requires employers to send the EIC notice to employees with anticipated wages are under a specific amount at the time they are hired. Louisiana also requires employers who meet the criteria to post a notice on an employee bulletin board.

(View the Louisiana EIC employer requirements.)

Maryland

Unlike other states, Maryland requires employers to submit EITC notices by December 31, 2019.

(Find eligible income and information requirements on the Comptroller of Maryland website.)

New Jersey

In New Jersey, employers must provide the EITC notice to potentially eligible employees annually.

(View New Jersey’s employer requirement to notify to employees.)

Oregon

Oregon employers are required to give written notice to employees of the available Oregon and federal EITC. This notice must be sent annually with the employee’s Form W-2.

(See EITC Notice Requirements on the Oregon.gov website.)

Texas

Employers must provide an EITC notice to employees by March 1, 2020.

(Read the Texas Comptroller website for details.)

Virginia

In Virginia, employers must post the EITC notice poster in your business where employees can read it.

(View more information about the Virginia EITC regulations.)

Philadelphia

Employers in the city of Philadelphia, PA must give the EITC notice to every Philadelphia resident employee. The information must be sent annually with the employee’s Form W-2 or Form 1099-MISC.

(View the EIC notification responsibilities of Philadelphia, PA employers here.)

Whether you are an employer or not, you should pay attention to these notices as you may qualify for the EIC. In fact, 22% of taxpayers don’t claim the credit who are eligible. And using tax credits could reduce your overall tax burden.

Help with Earned Income Tax Credit notices

Need more information about your responsibilities as an employer and whether or not you need to send or post the Earned Income Tax Credit notice? Rely on our team of small business certified tax pros to get your taxes right and keep your business on track. Connect with us at blockadvisors.com.

Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training. Our Block Advisors small business services are available at participating Block Advisors and H&R Block offices nationwide.