The Earned Income Tax Credit (EITC) is a refundable tax credit for certain employees based on their annual earnings. At the Federal level, employers must notify employees that they may be eligible for the credit if they worked for the company at any time during the year and the employer did not withhold income tax from their wages. Employers do not have to notify any employee who claimed exemption from withholding on Form W-4. In Oregon, employers are required to notify their employees about the state’s own Earned Income Tax Credit option.
The EITC notice is typically provided to all employees along with their annual W-2 form. For Xenium payroll clients, the EITC notice is printed on employee W-2’s and we’ve created an alert with Oregon’s information within Prism employee self-service. Clients who do not use Xenium’s payroll services should check with their payroll provider to ensure the notice is included with W-2s. Alternatively, Oregon employers can use the Bureau of Labor and Industries’ template notice which covers both the Federal and state requirements and is available here. Employers outside of Oregon can find the Federal requirements here.