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4 votes
Employees who want to take advantage of advance EIC must file an Earned Income Credit Advance Payment Certificate annually Which of the following is the correct form?

A. Form W-9
B. Form W-5
C. Form W-2
D. Not available in 2018

1 Answer

3 votes

Final answer:

Historically, Form W-5 was used to apply for advance Earned Income Credit, but this option ceased to exist after 2010. Now, the EITC is claimed when filing yearly tax returns, and there is no form for advance payments.

Step-by-step explanation:

The correct form employees must file annually to take advantage of advance Earned Income Credit (EIC), now known as the Earned Income Tax Credit (EITC), was Form W-5. However, it is important to note that the option for advance payments of the credit is no longer available as of 2011, which is likely what is referred to by 'Not available in 2018'.

So, while the correct answer for historical purposes would have been Form W-5, the current state of tax law means there is no form for advance EITC payments since this option has been eliminated. Taxpayers can now only claim the credit when they file their annual return using the appropriate forms, such as the 1040 series.

The Earned Income Tax Credit is a significant tax break designed to increase the incentive for low-income individuals to work rather than to rely on government assistance. It is calculated on income and number of children, and can result in a substantial refund to eligible taxpayers.

answered
User Harshil Pansare
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