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IRS Form W-5 Earned Income Credit Advance Payment

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IRS Form W-5

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The advance EITC allows certain taxpayers to receive their EITC in installments throughout the year, instead of a lump sum during the following filing season. Those who expect to qualify for advance EITC can register in January. The credit will appear in each paycheck, equally dispersed throughout the year.

Taxpayers who expect to qualify for advance EITC must expect:

  • Their 2005 income will be below $30,338 ($31,338 if married filing jointly);
  • To have at least one qualifying child; and
  • To qualify for the Earned Income Tax Credit (EITC).

Taxpayers who want to receive advance EITC payments must complete Form W-5, Earned Income Credit Advance Payment Certificate, give the bottom part to their employer and keep the top part for their records. With this authorization, employers will include the designated amount in the taxpayer's paychecks.

When participating taxpayers no longer expect to qualify for the EITC, they must fill out a new Form W-5 and give it to their employer to stop the advance payments.

Taxpayers whose only income is from self-employment are not eligible to receive advance EITC payments.

Questions and Answers

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Q1. What is the advance Earned Income Tax Credit (Advance EITC)?

A1. The advance EITC allows those taxpayers who expect to qualify for the Earned Income Tax Credit (EITC) and have at least one qualifying child to receive part of the credit in each paycheck during the year the taxpayer qualifies for the credit.

Return to EITC Questions and Answers
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Q2. Why should I be interested in the advance EITC?

A2. If you are working and

  1. you expect your 2005 income will be below approximately $31,000 ($33,000 if married filing jointly)
  2. you expect to have at least one qualifying child, and
  3. you expect to qualify for the EITC, you can choose to get part of the credit with your paycheck.
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Q3. How do I get Advance EITC payments?

A3. See if you qualify for Advance EITC payments by completing the five questions on the back of Form W-5, Earned Income Credit Advance Payment Certificate, available here or through your employer.

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

If your only income is from self-employment, you cannot qualify for advance EITC payments.

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Q4. Could my advance EITC payments change?

A4. Yes, if during the year, your income rises above the dollar limit, or you no longer qualify for the EITC, you need to fill out a new Form W-5 and give it to your employer to stop the advance payments.

If you no longer qualify for the Advance EITC, you will have to repay all advance EITC money when you file your tax return.

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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. The Form W-2 provided by your employer will show the amount of the advance EITC you received. This amount must be reported on your tax return. You will also be able to claim any additional credit to which you may be entitled.

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Q6. Where can I get more information and help with the EITC and advance EITC?

A6. If you want to claim the EITC or Advanced EITC you should make sure your are eligible for the credit before sending in your tax return. Don't guess. Know, if you are qualified.

Paid Tax Professional

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Q7. Where can my employer get information about AEITC?

A7. Employers can refer to Publication 15, Circular E, Employer's Tax Guide, and review our web page "Would you like to help your employees increase their take–home pay at no cost to you?"

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Resources and Tools

EITC Assistant

Will you qualify for the EITC this year? Tired of guessing? Don't guess. Know. There's a lot to know about qualifying for EITC, but the most important thing to know is you can get help figuring it all out.  The EITC Assistant is a convenient way for you to find out if you are likely to qualify for the EITC tax credit by answering questions online, about yourself, your children, your living situation, and your income. You will see the results of the eligibility check right away, on your computer screen. The Assistant can be used by individuals, tax practitioners, employers, community and public service organizations, and  IRS partners.  EITC is a refundable credit that helps families.  The EITC Assistant is:

Easy to follow

Simple to navigate

If in doubt, check it out using the EITC Assistant!

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Go to the IRS EITC Main Page

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