CALIFORNIA'S NEW MANDATORY W-2 NOTICE The California legislature
passed a new law regarding mandatory tax information which must be
provided to employees when issuing the W-2 or 1099 earnings
statement. Under this statute, California
employers are required to notify their employees in writing that
they may be eligible for the federal Earned Income Tax Credit (EITC). This new law is codified at sections 19850 through 19854 of the California Revenue and Taxation Code. Although
the EITC only applies to lower income taxpayers (adjusted
gross income of $37,783 with two children, $32,241 with one child, or
$12,590 with no children), the notice must be given to ALL employees regardless of income. The notification must be either personally delivered
to the employee or mailed to the employee's last known address, and
must be completed either one week before, or no later than one week
after the W-2 or 1099 is issued. The notice
must either contain the precise (or substantially similar) language
spelled out in the statute, or provide instructions on how to obtain
the information from the IRS. For your convenience, below is
sample language which will meet this requirement. Please call
your Firm contact with any questions about this new requirement.
SAMPLE NOTICE LANGUAGE
"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.
For more information, call us today at (818) 508-3700, or visit us on the web, at www.brgslaw.com.
Sincerely,Richard S. RosenbergPartnerBRG&S, LLP | |
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Universal City, CA
91608-1097
PH 818/508-3700
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New York, NY
10036
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www.brgslaw.com
The Management Side
Employment and Labor
Law Firm for Business
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