How to Get an Earned Income Credit Monthly

Earned Income Credit payments can be received monthly through your employer.

Advance Earned Income Credit (EIC) payments are available for taxpayers eligible to receive the EIC each year. Eligibility depends on your adjusted gross income, whether you have a qualifying child, and whether you expect to be able to claim the EIC for the current tax year. Filing status must be anything except married filing separately. You must complete a W-5 form for your employer to receive an Advance EIC payment with each paycheck. The amount varies depending on your wages. As of summer 2010, the maximum amount a taxpayer can receive is a total of $1,830 for the tax year.

Instructions

Determine Eligibility

1. Make sure that you and your spouse, if married filing jointly, have Social Security numbers.

2. Determine whether or not you have at least one qualifying child, which is required to claim an Advance EIC. According to the IRS, a qualifying child is "your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them." An adopted child also counts as a qualifying child. The child must be under age 19 at the end of the year.

3. Figure your expected AGI for the current tax year. For 2010, you qualify for an Advance EIC if the amount is below $35,535, or $40,545 (including your spouse's income) for married filing jointly. Those amounts may be adjusted each year.

4. Determine whether you expect to claim an EIC for the current tax year. You cannot receive Advance EIC payments unless you are eligible to receive an EIC when filing your taxes.

5. Fill out a W-5 form for your employer if you meet all of the criteria for eligibility.

W-5 Form

1. Print or type your full name and Social Security number at the top of the form.

2. Check "Yes" to question 1 if you have at least one qualifying child you can claim on your tax return, you do not have another current W-5 on file with a different employer and you choose to receive Advance EIC payments. Check "No" if any of the statements are not true.

3. Check the box that shows your expected filing status for the current tax year.

4. Check "Yes" if you expect to file a joint return with your spouse and she has a W-5 currently in effect with her employer. Check "No" if there is no other W-5 in effect. If both of you have a W-5 in effect, it will change the amount of your Advance EIC payments.

5. Sign and date the W-5 form at the bottom. Detach it from the instructions and give it to your employer.

6. File a Form 1040 or 1040A by the deadline for federal individual income tax returns. Claim the EIC in order to receive any additional amount for which you are eligible.

Tips & Warnings

• You must file a new W-5 form each calendar year.

• Notify your employer if any circumstances change that would affect your eligibility to receive an EIC. If you receive Advance EIC payments and are not eligible for the EIC, all payments must be repaid when your federal tax return is filed for the current tax year.

References

• Internal Revenue Service: Instructions for Form W-5