If you expect to qualify for the earned income credit in 1998, you may be able to start
getting part of the credit with your pay now, instead of waiting until you file your 1998
tax return in 1999. This is called Advance Earned Income Credit or AEIC.
To get part of the credit with your pay, you must have at least one qualifying child,
and meet certain other conditions. You cannot get the AEIC if you do not have a qualifying
child, even if you will be eligible to claim the earned income credit on your 1998 return.
To see if you qualify, get the 1997 Form W-5, Earned
Income Credit Advance Payment Certificate, from your employer or call 1-800-829-3676.
If you qualify, complete the Form W-5 and
give it to your employer. Your employer should then include part of the credit regularly
in your pay.
You may have only one Form W-5 in effect with a current employer at one time. If you
and your spouse are both employed, each of you should file a separate Form W-5.
If your situation changes after you give your employer Form W-5, you must give your
employer a new Form W-5. For example, you should give your employer a new Form W-5 if you
no longer qualify for the earned income credit or you no longer want to get advance
payments of the credit with your pay.
Remember, if you receive the earned income credit with your pay during 1998, you must
file Form 1040A or Form 1040 for 1998, to
report the advance payments you received during the year and to take advantage of any
remaining credit. You cannot use Form 1040EZ. The total of the advance payments you
receive should be shown on your 1998 Form W-2.
The 1998 Form W-5 expires on December 31, 1998. If you expect to be able to claim the
credit in advance for 1999, you must give a new 1999 Form W-5 to your employer.
For information on who can claim the earned income credit for 1997, see Topic 601. To get Publication
596 and Schedule EIC, call
1-800-829-3676.
If you are an employer and want more information about the advance payment and how it
affects you, see Topic 754.
Tax Topics & FAQs | Tax Help Archives | Home
