Hiring Workers
- Employer's Obligations When Hiring Workers
- Classifying Workers
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- Advance Earned Income Credit
- Worker's Compensation Insurance
- Federal Employment Taxes
- Employment Eligibility Verification
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- Business Structures
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- Home Office Deduction
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- Hiring Workers
- Meals and Entertainment
- Retirement
- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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Advance Earned Income Credit
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Answering Employee Questions About Advance Earned Income Credit Payments
Your employee(s) may have questions about the advance earned income credit.
The following information may helpful to you as an employer:
1) Employee tells you he/she has other employers:
- The employee only has to give Form W-5 to one employer.
- The employee keeps the top part form Form W-5.
- The employee gives the employer the lower part of Form W-5.
2) Married taxpayers:
If the employee is married and both spouses are employed and expect to qualify for the earned income credit, each spouse may give Form W-5 to his/her employer.
3) Tax return filing requirement for employee:
If the employee receives advance earned income payments he/she must file either:
- Form 1040 or
- Form 1040A (not Form 1040EZ) to report the payments and claim any additional credit.
4) Employee may have to file Form 8862:
If the employee's earned income credit was reduced or denied for any reason, except for math or clerical errors, since 1996, he/she must attach Form 8862 to his/her return to get the credit.
If Form 8862 is required and not attached, the credit will be automatically denied.
Related Links
- Employee or Independent Contractor?
- Types of Workers
- Employee Defined
- What Are Common Law Employees?
- Not Sure How to Classify Someone?
- What Are Statutory Employees?
- Withholding Taxes for Statutory Employees
- Statutory Employees Have Two Options for Reporting Income
- Withholding Taxes for Statutory Employees
- Statutory Employees Have Two Options for Reporting Income
- Withholding Taxes
- Schedule C and Self-Employment Taxes for Statutory Nonemployees
- Employer Reporting Requirement for New Hires
- What is the Earned Income Credit?
- Advance Earned Income Credit Payments
- Form W-5
- Maximum Advance Earned Income Credit Payment
- Withholding Taxes
- Advance Earned Income Credit Payments Treated as Tax Deposits
- How Advance Earned Income Credit Payments are Provided to Employees
- Reporting Advance Earned Income Credit payments
- Withholding Employment Taxes
- Employment Tax Forms Used When Hiring
- Annual Employment Forms
- Employment Verification
- State New Hire Registry
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