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The 1999 Advance Earned Income Tax Credit (Advance EITC)
Q's and A's...
...on more $$$ in your pay!

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Questions and Answers about Advance EITC

Q1. What is the Advance EITC?

A1. If you expect to claim the Earned Income Tax Credit (EITC) on your next federal tax return and have at least one qualifying child, you may be able to get part of the EITC starting now and throughout the year "in advance" of claiming the EITC on your return. This is called the Advance EITC. With the Advance EITC, you receive a portion of the EITC (that you would normally claim on your return) in your pay throughout the year. And, you can still claim extra EITC on your return.

Q2. Why should I he interested in the Advance EITC?

A2. This year, you can get up to $1,387 more income in your pay. If you expect that your income for 1999 will he less than S26,928 and you have at least one child living with you in the U.S., the Advance EITC may be for you, and it's easy to get!

Q3. How can I get the Advance EITC payments?

A3. First, see if you qualify for the Advance EITC payments by completing the five questions on the back of Form W-5, Earned Income Credit Advance Payment Certificate. You can get this form through your employer or by requesting a free copy from the IRS at 1-800-829-3676.

If you qualify, complete the bottom portion of Form W-5 and give it to your employer. Then, based on your income, your employer adds additional $$$ to your take-home pay.

NOTE: If your only income is from self-employment, you cannot get the Advance EITC.

Q4. If I receive Advance EITC payments and then, during the same year, I get a pay increase that puts me over the income limit that initially qualified me for the Advance EITC, do I need to tell my employer?

A4. Yes. If during the year, your income increases above the dollar limit that qualified you for the Advance EITC, or you find out that you will no longer qualify for the EITC on your federal tax return, you will need to fill out a new Form W-5 and give it to your employer to stop the advance payments. In addition, you will have to pay back Advance EITC payments when you file your tax return.

Q5. If I get the Advance EITC, do I have to file a tax return?

A5. Yes. If you receive the Advance EITC, you must file a tax return. This will show the IRS the payments you received, and will allow you to claim any extra EITC you may he entitled to.

Q6. Where can I get more information on the EITC and the Advance EITC?

A6. Call the IRS at 1-800-829-3676 for a free copy of Publication 596, Earned Income Credit. This publication explains the rules for eligibility, and for claiming the EITC and the Advance EITC.

Also, download IRS forms and publications from the IRS Web site.

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