Employees who claimed advance payment of Earned Income Credit (EIC) as well as employees who wish to claim it in the future must file a new Earned Income Credit Advance Payment Certificate (Form W-5) each calendar year. Eligibility for advance payment is explained on the Form W-5.
The advance payment of Earned Income Credit provides up to $1,830 per year on a current basis to taxpayers who have incomes under $35,535 ($40,545 if married filing jointly) and who have children living with them. Eligible employees must file a form W-5 to receive their prorated payments of the credit together with their pay. Employees who don’t file Form W-5 will not get any advance payment however they can still claim the credit on their income tax returns.
Other provisions of EIC do not apply to advance payment but must be claimed on the individual’s tax return, as must the balance of any credit not received in advance. The Earned Income Credit has provisions to allow for more than one qualifying child and separate, more restrictive provisions for taxpayers without children.
Please submit W-5 forms for calendar 2010 as soon as possible. Forms will be processed as received and will not take effect retroactively. W-5 forms should be available from the Internal Revenue Service web site. | 
