Earned Income Tax Credits (EITC)—federal and state

The Earned Income Tax Credit (EITC) helps low to moderate-income workers and families get a tax break. Claiming the credit can reduce the tax owed and may also result in a larger refund.

Several states require that employers give their employees annual notices about federal and state Earned Income Tax Credits (EITCs). 

Action required if you do business in a state with EITCs

While Gusto provides notice of federal EITCs on copy B of the annual Form W-2, employers are responsible for delivering any state-specific notifications outside of Gusto. 

Here’s what you need to do:

  1. Check if you do business in a location with EITC.
  2. Determine if any of the qualifying rules apply to your employees.
  3. Provide the required state or local notification(s) to applicable employees. 

Employees can use this EITC assistant to check their eligibility as well.

Learn more

Employees and employers can learn more on our blog