SECTIONS 19850-19854 - California Statutes

REVENUE AND TAXATION CODE

SECTION 19850-19854

19850. This act shall be known and may be cited as the Earned
Income Tax Credit Information Act.

19851. The Legislature finds and declares as follows:
(a) Congress created the federal earned income tax credit (EITC)
in 1975 to offset the adverse effects of the Medicare and social
security payroll taxes on working poor families and to encourage
low-income workers to seek employment rather than welfare.
(b) Due to a relatively low percentage of federal earned income
tax credit eligible persons that participate in the federal Earned
Income Tax Credit program, hundreds of millions of federal dollars go
unclaimed by the working poor in California.
(c) In order to alleviate the tax burden on working poor persons
and families, to enhance the wages and income of working poor persons
and families, to ensure that California receives its share of the
federal money available in the federal Earned Income Tax Credit
program, and to inject additional federal money into the California
economy, the state shall facilitate the furnishing of information to
working poor persons and families regarding the availability of the
federal earned income tax credit so that they may claim that credit
on their federal income tax returns.
(d) It is the intent of this act to offer the most cost-effective
assistance to eligible taxpayers through notices provided by their
employers.

19852. For purposes of this part, the following terms have the
following meanings:
(a) "Employer" means any California employer who is subject to,
and is required to provide, unemployment insurance to his or her
employees, under the Unemployment Insurance Code.
(b) "Employee" means any person who is covered by unemployment
insurance by his or her employer, pursuant to the Unemployment
Insurance Code.
(c) "EITC" means the federal earned income tax credit, as defined
in Section 32 of the Internal Revenue Code.

19853. (a) An employer shall notify all employees that they may be
eligible for the EITC within one week before or after, or at the same
time, that the employer provides an annual wage summary, including,
but not limited to, a Form W-2 or a Form 1099, to any employee.
(b) The employer shall provide the notification required by
subdivision (a) by handing directly to the employee or mailing to the
employee's last known address either of the following:
(1) Instructions on how to obtain any notices available from the
Internal Revenue Service for this purpose, including, but not limited
to, the IRS Notice 797 and Form W-5, or any successor notice or
form.
(2) Any notice created by the employer, as long as it contains
substantially the same language as the notice described in paragraph
(1) or in subdivision (a) of Section 19854.
(c) The employer shall not satisfy the notification required by
subdivision (a) by posting a notice on an employee bulletin board or
sending it through office mail. However, these methods of
notification are encouraged to help inform all employees of the EITC.
(d) Every employer shall process, in accordance with federal law,
Form W-5 for advance payments of the EITC, upon the request of the
employee.

19854. The notice furnished to employees regarding the availability
of the EITC shall state as follows:

BASED ON YOUR ANNUAL EARNINGS, YOU MAY BE ELIGIBLE TO RECEIVE THE
EARNED INCOME TAX CREDIT FROM THE FEDERAL GOVERNMENT. THE EARNED
INCOME TAX CREDIT IS A REFUNDABLE FEDERAL INCOME TAX CREDIT FOR
LOW-INCOME WORKING INDIVIDUALS AND FAMILIES. THE EARNED INCOME TAX
CREDIT HAS NO EFFECT ON CERTAIN WELFARE BENEFITS. IN MOST CASES,
EARNED INCOME TAX CREDIT PAYMENTS WILL NOT BE USED TO DETERMINE
ELIGIBILITY FOR MEDICAID, SUPPLEMENTAL SECURITY INCOME, FOOD STAMPS,
LOW-INCOME HOUSING OR MOST TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
PAYMENTS. EVEN IF YOU DO NOT OWE FEDERAL TAXES, YOU MUST FILE A TAX
RETURN TO RECEIVE THE EARNED INCOME TAX CREDIT. BE SURE TO FILL OUT
THE EARNED INCOME TAX CREDIT FORM IN THE FEDERAL INCOME TAX RETURN
BOOKLET. FOR INFORMATION REGARDING YOUR ELIGIBILITY TO RECEIVE THE
EARNED INCOME TAX CREDIT, INCLUDING INFORMATION ON HOW TO OBTAIN THE
IRS NOTICE 797 OR FORM W-5, OR ANY OTHER NECESSARY FORMS AND
INSTRUCTIONS, CONTACT THE INTERNAL REVENUE SERVICE BY CALLING
1-800-829-3676 OR THROUGH ITS WEB SITE AT WWW.IRS.GOV.