IRS Notice 1015 ( Revised December 2010 )  What Is the EIC?  The EIC is a refundable tax credit for certain workers. Which Employees Must I Notify About the EIC?  You must notify each employee who worked for you at anytime during the year and from whom you did not withhold income tax. However, you do not have to notify any employee who claimed exemption from withholding on Form W-4, Employee’s Withholding Allowance Certificate. You are encouraged to notify each employee whose wages for 2010 are less than $48,362 that he or she may be eligible for the EIC. How and When Must I Notify My Employees?  You must give the employee one of the following : ♦ The IRS Form W-2, Wage and Tax Statement, which hasthe required information about the EIC on the back of Copy B. If you are required to give Form W-2 and do so on time, no further notice is necessary if the Form W-2 has the required information about the EIC on the back of the employee’s copy. ♦ A substitute Form W-2 with the same EIC information onthe back of the employee’s copy that is on Copy B of theIRS Form W-2. If a substitute Form W-2 is given on time but does not have the required information, you must notify the employee within 1 week of the date the substitute Form W-2 is given. ♦ Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). If Form W-2 is required but is not given ontime, you must give the employee Notice 797 by the date Form W-2 is required to be given. ♦ Your written statement with the same wording as Notice 797. If Form W-2 is required but is not given on time, you must give your written statement by the date Form W-2 is required to be given. If Form W-2 is not required, you must notify the employee by February 7, 2011. You must hand the notice directly to the employee or send it by first-class mail to the employee’s last known address. You will not meet the notification requirements by posting Notice 797 on an employee bulletin board or sending it through office mail. However, you may want to post the notice to help inform all employees of the EIC. You can get copies of the notice from IRS.gov or by calling1-800-829-3676. How Will My Employees Know If They CanClaim the EIC?  The basic requirements are covered in Notice 797. For more detailed information, the employee needs to see Pub. 596, Earned Income Credit (EIC), or the instructions for Form1040, 1040A, or 1040EZ. How Do My Employees Claim the EIC?  Eligible employees claim the EIC on their 2010 tax return. Even employees who have no tax withheld from their pay orowe no tax can claim the EIC and get a refund, but they must file a tax return to do so. For example, if an employee has no tax withheld in 2010 and owes no tax but is eligiblefor a credit of $829, he or she must file a 2010 tax return to get the $829 refund. Can My Employees Get Advance EIC Payments?  After 2010, your employees can no longer get advance payments of the credit in their pay during the year as they could in 2010 and earlier years, because the law changed. However, if they are eligible, they will still be able to claim the credit on their 2011 return. Form W-5, Earned Income Credit Advance PaymentCertificate, is no longer in use.