Resources and Tools
AEITC and the W-5 Form
The Earned Income Tax Credit (EITC) is a refundable credit for certain qualified workers. It is intended to help offset some of the increases in living expenses and social security taxes. This credit reduces the amount of tax owed, if any, and may result in a refund to the taxpayer.
Eligible employees can receive part of their earned income credit for 2006 in their paychecks throughout the year, instead of waiting until they file their 2006 tax returns. To be eligible for this Advance EITC payment, an employee must expect to have a qualifying child, expect to fall within certain income limits, and expect to meet other specific requirements, which are explained on Form W-5, Earned Income Tax Credit Advance Payment Certificate, and in more detail in Publication 596, Earned Income Tax Credit.
Here's how it works: An eligible employee who wants the credit with his or her pay must give their employer a completed and signed 2006 Form W–5. Employers are required by law to make advance payments to most eligible employees who provide the form. The 2006 Form W–5 is valid only for the 2006 calendar year. If you expect to be eligible the following year, you must give your employer a new form.
http://www.irs.gov/taxtopics/tc754.html
W-5 Form:
http://www.irs.gov/individuals/article/0,,id=118888,00.html
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