If you qualify for the Earned Income Credit you can receive a portion of the money in your paycheck just by filling out a form and turning it in to your employer. Most people choose to wait until the end of the year and have the entire lump sum given to us with our federal income tax refund. But, if you would rather have your earned income split up and administered to you throughout the year you can certainly do so. This is process is called advance earned income.
The form you will need to complete in order to get these advance earned income payments is the IRS form W5. Click on the IRS link underneath this article in order to get the form. The faster you fill our the W5 form and get it back to your employer, the sooner you will have access to your extra money.
Once the W5 form appears on your screen, scroll down to page 2 and answer all five of the questions to determine whether or not you qualify to claim the earned income credit. If you do, then scroll back up and check off the three questions on the first page.
Make sure that you thoroughly read both pages, complete and sign the W5. Print out the form and cut off the bottom portion (the completed portion) at the perforated lines. Retain the top portion for your own records.
Take the W5 form to your employer and he/she will do the rest. That’s it. In the next couple of paychecks or so you will see the extra money being added into your paycheck. Remember that you can only get a portion of your EIC through advance earned income; you’ll get the rest when you file during tax season.
**Remember, the IRS Form W5 needs to be updated on a yearly basis as long as you continue to utilize the payments.
**I am not an accountant, and this is NOT meant to be used as financial advice.