Earned Income Credit (EIC) is a credit for certain workers that can reduce the federal tax you owe and may provide a refund even if you do not owe any tax.

If you expect your income to be lower than $35,463 in 2009 ($38,583 if you expect to file a joint return for 2009) and you have at least one qualifying child, you may be eligible to receive federal advance EIC payments.

If you choose to get advance payments, you can receive up to $1,826 refundable credit in addition to your regular paycheck before filing your federal income tax return. The amount you can receive in advance is limited to the basic earned income credit amount for families with one qualifying child. If you are eligible for a larger credit, you will receive the extra credit when you file your tax returns.


Eligibility Requirements

You may be able to claim federal Advance EIC for 2009 if you meet all the following requirements:

You (and your spouse if filing a joint return) have a valid social security number issued by the Social Security Administration

• You expect to have at least one qualifying child and to be able to claim the credit using that child. If you do not expect to have a qualifying child, you may still be eligible for the EIC, but cannot receive advance EIC payments.
• You expect your 2009 earned income and adjusted gross income will be less than $35,463 ($38,583 if you expect to file a joint return for 2009)
• You expect to be able to claim the EIC for 2009

Qualifying children meet all three of these conditions:

• The child is your:
  1. Son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew), or adopted child.
• At the end of 2009, the child is under age 19, or under age 24 and a student, or any age and permanently and totally disabled. A student is a child who during any 5 months of 2009:
  1. Was enrolled as a full-time student at a school, or
  2. Took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or Internet school.
• The child lives with you in the United States for over half of 2009. But you do not have to meet this condition if:
  1. The child was born or died during the year and your home was this child's home for the entire time he or she was alive in 2009, or
  2. The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a family member and the child lived with you for over half of the part of the year before he or she was kidnapped.

Applying for the Advance Earned Income Credit
Fill out a W-5 Earned Income Credit Advance Payment Certificate, and submit it to your agency personnel office. If you get advance payments, you must file a federal tax return.

Form W-5 expires on December 31 of each year. If you are eligible to get Advance EIC payments next year, you must file a new form.

Changes in Your Situation
You should file a new W-5 if:

• You no longer expect to have a qualifying child
• You no longer expect to be able to claim EIC this year
• You no longer want advance payments
• Your spouse files a W-5 with his or her employer
  
  Download Form W-5
  Learn more on the IRS Web site
  See the Taxes FAQ