Important Employer Reminder: Earned Income Tax Credit (EITC) Employee Notice

Employers are reminded of their obligation to notify employees about the potential availability of the federal and state Earned Income Tax Credit (EITC). The EITC is a refundable tax credit designed to support certain working individuals and families who meet eligibility requirements.

Under federal law, employers must provide an EITC notice to each employee who worked for them during the year if no federal income tax was withheld from that employee’s wages, unless the employee claimed exemption from withholding on Form W-4. The IRS provides Notice 797 for informational purposes to satisfy this requirement.

To claim the federal EITC, eligible employees must file a federal tax return and complete the appropriate EITC form included in the Federal Income Tax Return instructions. Many states also offer their own EITC programs, which may provide additional tax benefits.

Employer Best Practices
• Ensure EITC notices are distributed to applicable employees
• Consider sharing EITC information broadly to promote awareness
• Retain documentation showing notices were provided
• Remind employees that eligibility is determined by the IRS, not the employer

Providing timely and accurate EITC notices supports compliance and helps employees access valuable tax credits for which they may qualify.