Numerous states and at least one city require employers to provide employees with notices about the state and/or federal Earned Income Tax Credit (EITC) and certain other tax credits. The EITC is a refundable income tax credit for low to moderate income workers. In many cases, the notice is required annually. Below, we summarize these state and local requirements.
Note: Under federal law, employers must notify an employee of the EITC if the employee worked for them at any time during the year and they didn’t withhold income tax from the employee’s wages. However, this requirement doesn’t apply if the employee claimed exemption from withholding on Form W-4, Employee’s Withholding Certificate.
In 2023, California amended and expanded its notice requirements. Beginning with notices furnished on or after January 1, 2024, employers must notify all employees that they may be eligible for:
- a free online program for taxpayers to complete and e-file their state personal income tax returns)
he employer may provide the first notice via email to an email account of the employee's choosing in PDF, JPEG, or other digital image file type format, only if an employee affirmatively, and in writing or by electronic acknowledgment, opts into receipt of electronic statements or materials.
Both of the notices must state substantially the following:
For tax years beginning January 1, 2023 and after, employers must provide all employees with a written notice of the availability of the federal and state EITC and the federal and state child tax credits. The notice must be provided at least once per year.
An employer may send the written notice to employees electronically, including via email or text message.
A sample notice is available on the Colorado state website.
Employers are required to notify employees that they may be eligible for the federal EITC each year, unless the employee receives gross wages that exceed the maximum amount that may qualify for the federal EITC.
The employer must provide the following notice by giving or mailing it to the employee:
- Any notice available from the Internal Revenue Service for this purpose, including IRS Form 797; or
- Any notice created by the employer, as long as it contains substantially the same language as the IRS notice.
The EITC notice must be furnished within one week before or after, or at the same time, that the employer provides a Form W-2 to any employee.
Employers must post and keep posted a copy of the EITC notice published by the state Bureau of Labor. This notice is included in the Regulation of Employment poster.
On or before December 31 each year, all Maryland employers must provide an electronic or written notice to an employee who may be eligible for the federal and Maryland EITC. Employers may choose to notify all of their employees or just those with income at or below the maximum for EITC eligibility. Go to the Maryland state website to obtain this year’s notice.
All employers must give written notice to employees who may be eligible for the federal and/or New Jersey EITC each year. The notice must be provided between January 1 and February 15. The required notice is available on the New Jersey state website. Employers must notify employees, ages 18 and over, whom they know or reasonably believe may be eligible for the federal credit and/or NJ EITC, based on each employee’s prior year wages.
All Oregon employers must notify their employees about the federal and state EITC each year. The notice must be provided with the employee’s W-2 and must:
- Be in English and in the language the employer typically uses to communicate with the employee.
- Include website addresses for the Internal Revenue Service and the Oregon Department of Revenue where the employee can find information about the state and federal EITC.
Employers in Philadelphia are required to provide a notice to their employees each year about the programs below:
Employers must typically provide the notices at the same time they give employees their W-2, or comparable forms.
All Texas employers must notify their employees of the federal EITC no later than March 1 of each year. An employer may provide the notice in any of the following ways:
- In person
- Electronically at the employee’s last known email address
- Through a flier included with a pay stub (wage statement), in paper or electronic form
- By first-class U.S. mail to the employee’s last known address
Employers may use IRS Notice 797 or a written statement with the same wording as IRS Notice 797 when notifying employees.
All employers must post notices in the workplace about the federal EITC and the state Credit for Low-Income taxpayers. The notices must be posted in the same location where other employee notices required by state or federal law are posted. The required notices are available on the Virginia state website.
Determine whether you are subject to any EITC notice requirements and ensure compliance if you are.