Earned Income Tax Credit

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WHO IS ELIGIBLE TO RECEIVE THIS TAX CREDIT?

2009 Tax Year

Earned income credit is available to employees who meet certain criteria or qualifications. The credit may be taken as a lump-sum when an employee files his or her income tax return, or employees may request advance payments through their paychecks for a portion (60%) of the credit due them, up to a maximum of $1,826. The maximum earned income amount applies to the total earned by both spouses if a joint tax return is filed. The remaining credit, as well as any credit due to childless workers, must be claimed on the employees’ personal tax returns.

To qualify for ADVANCE Earned Income Credit, an employee must have a valid social security number, and at least one qualifying child, and earn less than $35,463 or less than $38,583 if married and filing jointly. If an employee qualifies for advance earned income credit and wants to fill out the proper certificate (Form W-5, Earned Income Credit Advance Payment Certificate), to submit to the Payroll Office, please do one of the following: 

  • Call (618) 453-3392 to request a blank Form W-5
  • Write or go to the Payroll Office, 1255 Douglas Drive, Mailcode 6820
  • You may access http://www.irs.gov/pub/irs-pdf/fw5.pdf 
    to view and/or download a Form W-5. Please be sure to read all instructions very carefully.

Choice #1: If a qualifying employee chooses the advance earned income credit, payments (up to $1,826 for 2009) will be included in the employee’s regular paychecks until the maximum is reached. The amount of $1,826 is a portion of the credit available to an employee with one qualifying child. If an employee is entitled to a larger credit, the balance is refunded after the employee’s income tax return has been filed.

Choice #2: If a qualifying employee does not choose to receive the payments in his or her paycheck throughout the year, he or she may receive the credit in a lump sum when the employee files an income tax return for the year.

Employees with no qualifying children are not allowed to receive payments in advance.

**Important Note: The Form W-5 will be in effect from the time it is entered into the Payroll system in a calendar year until the last pay period of the same calendar year. In other words, the employee must renew the form W-5 for each calendar year, assuming the employee is still eligible.

If an employee becomes ineligible to claim advance earned income credit, he or she must revoke Form W-5 within 10 days after learning about the change of circumstances. To revoke the Form W-5 certificate, the employee must fill out a new W-5 and submit it to the Payroll Office. If you have any questions concerning Advance Earned Income Credit, please call (618) 453-3392.