April may be taxing, but no IRS posting is needed
Tax day arrives on April 15 and while workers must remember to file their income taxes by the deadline, employers do not need to display any tax-related workplace posters from the Internal Revenue Service (IRS).
The IRS does, however, have a notification requirement that applies to employers. Employers must provide qualified employees with Notice 797 or other information to let them know they may be eligible for the Earned Income Credit (EIC).
How is a notice provided to employees?
A notice requirement is different than a posting requirement. A notice must be given directly to the employee. The IRS notes that employers must hand the EIC notice or other information listed below directly to the qualified employee or send it by first-class mail to the employee’s last-known address.
To meet the EIC notification requirement, an employer must provide the employee with:
- The IRS Form W-2, which includes the required EIC information;
- A substitute Form W-2 with the same EIC information;
- Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC); or
- The employer’s written statement with the same wording as Notice 797.
The notification requirement is not met by posting Notice 797 on an employee bulletin board. Employers may post the notice if they would like, but this is not a requirement.
Who needs to receive EIC information?
Information about the EIC must be provided to employees who worked for an employer during the year but did not have any income tax withheld from their wages. Employees who claimed exemption from withholding on the Form W-4 do not need to be notified.
Qualifying employees must receive this information early in the year. This year’s deadline for providing EIC information to workers was February 3.
Some states have a tax-related posting requirement
Employers must comply with state posting requirements in addition to federal ones, and Virginia and Louisiana require employers to display a workplace posting relating to the EIC. Virginia employers need to post an Earned Income Tax Credit posting from the federal government as well as a state posting about an income tax credit for low-income individuals.
In Louisiana, employers need to post the Earned Income Credit posting, which is updated annually with new information about income limits for qualifying individuals.
The state postings must be displayed year-round. In states without a tax-related posting requirement, no EIC poster is needed.
Key to remember: The IRS does not require employers to display any workplace postings, but a state may have an EIC posting requirement. All employers must provide qualified employees with information about the EIC to meet the notice requirement.