CA EITC Requirements

California Updates EITC Employer Notification Requirements

California adopted Senate Bill (SB) 131, which updates the requirements for employers to notify their employees that they may be eligible for the earned income tax credit (EITC). Employers must comply with these new notification requirements beginning January 1, 2024.

EITC Notification Requirement

According to the law, employers must inform employees of their potential eligibility for federal and California EITC within one week of providing an annual wage summary, including a Form W-2 or a Form 1099, to any worker. In addition, employers must also send a second notification to all employees in March of the same year. This requirement applies to all California employers obligated to provide unemployment insurance to their employees under the state's Unemployment Insurance Code.

Notification Delivery

Employers have several options for notifying employees about VITA, CalFile, and state and federal antipoverty tax credit eligibility. These include handing out notifications directly, sending them by mail to the employee's last known address, or sending them electronically. It's important to note that posting a notice on an employee bulletin board or sending it through office mail does not meet notification requirements under the law. However, employers are encouraged to use these methods to ensure all employees are informed about their eligibility for federal and California EITC and other tax credits.

More information concerning the notification's wording can be found in Section 19853 of the Revenue and Taxation Code or Section 11 of SB 131

California Updates EITC Employer Notification Requirementshttps://www.cbiz.com/Portals/0/Images/HCM_CA_EITC_notification.png?ver=SjJSA7uWNiHvR67_Y3RXyw%3d%3dhttps://www.cbiz.com/Portals/0/Images/CBIZ_HCM_eitc.png?ver=nsWc5ifrX-6UaYA4lH7juQ%3d%3dCalifornia employers must comply with new requirements to notify employees of their potential eligibility for the Earned Income Tax Credit. Find out what you need to do to comply with these new mandates, effective January 1, 2024.2023-08-30T17:00:00-05:00California employers must comply with new requirements to notify employees of their potential eligibility for the Earned Income Tax Credit. Find out what you need to do to comply with these new mandates, effective January 1, 2024.Employee ManagementHRIS SolutionsPayroll ServicesYes