Don’t Forget EITC Notice When Sending W2s!

This time of year, employers are soon preparing to send W-2s so employees can file their taxes, but do you have the EITC Notice on your list? As of recently, employers now have a requirement to notify employees regarding potential earned income tax credit (EITC) eligibility.

EITC Notification Requirement

Employers must notify all employees that they may be eligible for the federal and the California EITC. The requirement applies to any California employer that is subject to and is required to provide unemployment insurance to its employees under the State’s Unemployment Insurance Code.

Notification Updates

More specifically, the law requires employers to notify all employees that they may be eligible for VITA, CalFile, and other state and federal antipoverty tax credits, including the federal and the California EITC. Employers are required to send this notice twice a year.

The first notification must take place within one week before or after, or at the same time, when employers provide an annual wage summary, including, but not limited to, a Form W-2 or a Form 1099, to any worker. Employers will also need to send a second notification to all employees during March of the same year.

Notification Delivery

Employers may provide these notifications by handing them directly to employees or mailing them to the employee’s last known address. It is not compliant to simply post a notice on an employee bulletin board or send it through office mail.

To send the notification via email, the employer must send the notice 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.

CEA Members can access a Sample EITC Notice on our HR forms page. Questions? Call us at 800.399.5331 or CEAinfo@employers.org