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Hiring Employees How to compute the Advanced Earned Income Credit allowanceyour employee applied for An employee who is eligible for the earned income credit (EIC) andhas a qualifying child is entitled to receive EIC payments with his or her pay during theyear. To get these payments, the employee must give you a properly completed Form W-5,Earned Income Credit Advance Payment Certificate. You are required to make advance EICpayments to employees who give you a completed and signed Form W-5. Lourdes Hoteles motelLength of effective period. Form W-5 is effective for the firstpayroll period ending on or after the date the employee gives you the form (or the firstwage payment made without regard to a payroll period). It remains in effect until the endof the calendar year unless the employee revokes it or files another one. Eligibleemployees must file a new Form W-5 each year. How to figure the advance EIC payment. To figure the amountof the advance EIC payment to include with the employee's pay, you must consider:
Note:ERROR MSG If during the year you have paid an employeetotal wages of at least $27,413, you must stop making advance EIC payments to thatemployee for the rest of the year. Figure the amount of advance EIC to include in the employee's pay byusing the tables that begin on page 56 ofPublication 15. There are separate tables for employees whose spouses have aForm W-5 in effect. See page 33for instructions on using the advance EIC payment tables. The amount of advance EIC paidto an employee during 2000 cannot exceed $1,412. Paying theadvance EIC to employees
Publication 15hotels Rotterdam Circular E, Employer's Tax Guide |
