Form W-5 - Earned Income Credit Advance Payment Certificate

Department of the Treasury

Form W-5

Internal Revenue Service

Instructions

Who Is Eligible To Get Advance

Who Is a Qualifying Child?

EIC Payments?

Any child who meets all three of the

Changes To Note

following conditions is a qualifying child.

You are eligible to get advance EIC payments

Beginning in 1998, modified AGI (adjusted

if all three of the following apply.

1. The child is your son, daughter, adopted

gross income) includes tax-exempt interest

child, stepchild, foster child, or a descendant

1. You have at least one qualifying child.

and certain nontaxable pensions, annuities,

(for example, your grandchild) of your son,

and IRA distributions. For details, see the

2. You expect that your 1998 earned

daughter, or adopted child.

1997 revision of Pub. 596, Earned Income

income and modified AGI will each be less

Note: An adopted child includes a child

Credit. Also earned income does not include

than $26,473. Include your spouse’s income

placed with you by an authorized placement

workfare payments. These are cash payments

if you plan to file a joint return. As used on

agency for legal adoption even if the adoption

certain families receive from a state or local

this form, earned income does not include

is not final. A foster child is any child you

agency that administers public assistance

amounts inmates in penal institutions are paid

cared for as your own child.

programs funded under the Federal

for their work. For most people, modified AGI

Temporary Assistance for Needy Families

is the same as adjusted gross income. But

2. The child is under age 19 at the end of

program in return for (1) work experience

see the 1997 revision of Pub. 596 for

1998, or under age 24 at the end of 1998 and

activities (including work associated with

information about how to figure your 1998

a full-time student, or any age at the end of

remodeling or repairing publicly assisted

modified AGI if you expect to receive

1998 and permanently and totally disabled.

housing) if sufficient private sector

tax-exempt interest; nontaxable payments

3. The child lives with you in the United

employment is not available, or (2) community

from a pension, annuity, or an IRA; or you

States for over half of 1998 (for all of 1998 if

service program activities.

plan to file a 1998 Form 1040.

a foster child). If the child does not live with

3. You expect to be able to claim the EIC

you for the required time because the child

Purpose

for 1998. To find out if you may be able to

was born or died in 1998, the child is

Use Form W-5 if you are eligible to get part

claim the EIC, answer the questions on page

considered to have lived with you for all of

of the EIC in advance with your pay and

1998 if your home was the child’s home for

choose to do so. The amount you can get in

the entire time he or she was alive in 1998.

How To Get Advance EIC

advance generally depends on your wages. If

Note: Temporary absences such as for

you are married, the amount of your advance

Payments

school, medical care, or vacation count as

EIC payments also depends on whether your

time lived at home. Members of the military

If you are eligible to get advance EIC

spouse has filed a Form W-5 with his or her

on extended active duty outside the United

payments, fill in the 1998 Form W-5 at the

employer. However, your employer cannot

States are considered to be living in the

bottom of this page. Then, detach it and give

give you more than $1,363 throughout 1998

United States.

it to your employer. If you get advance

with your pay.

payments, you must file a 1998 Federal

Married child. If the child is married at the

If you do not choose to get advance

income tax return.

end of 1998, that child is a qualifying child

payments, you can still claim the EIC on your

only if you may claim him or her as your

You may have only one Form W-5 in effect

1998 tax return.

dependent, or the following Exception

with a current employer at one time. If you

applies to you.

and your spouse are both employed, you

What Is the EIC?

should file separate Forms W-5.

Exception. You are the custodial parent

The EIC is a credit for certain workers. It

and would be able to claim the child as your

This Form W-5 expires on December 31,

reduces tax you owe. It may give you a

dependent, but the noncustodial parent

1998. If you are eligible to get advance EIC

refund even if you don’t owe any tax. For

claims the child as a dependent because—

payments for 1999, you must file a new Form

1998, the EIC can be as much as $2,271 if

W-5 next year.

1. You signed Form 8332, Release of Claim

you have one qualifying child or $3,756 if you

to Exemption for Child of Divorced or

have more than one qualifying child. If you do

You may be able to get a larger credit

Separated Parents, or a similar statement,

not have a qualifying child, you may still be

when you file your 1998 return. For

agreeing not to claim the child for 1998, or

eligible for a credit of up to $341, but you

details, see Additional Credit on page 2.

cannot receive advance EIC payments. See

Who Is a Qualifying Child? on this page.

(Continued on page 2)

Give the lower part to your employer; keep the top part for your records.

Detach here

Earned Income Credit Advance Payment Certificate

W-5

OMB No. 1545-1342

Form

Use the current year’s certificate only.

Give this certificate to your employer.

Department of the Treasury

This certificate expires on December 31, 1998.

Internal Revenue Service

Type or print your full name

Your social security number

Note: If you get advance payments of the earned income credit for 1998, you must file a 1998 Federal income tax return. To get advance

payments, you must have a qualifying child and your filing status must be any status except married filing a separate return.

Yes

I expect to be able to claim the earned income credit for 1998, I do not have another Form W-5 in effect with any

other current employer, and I choose to get advance EIC payments

Do you have a qualifying child?

Are you married?

4 If you are married, does your spouse have a Form W-5 in effect for 1998 with any employer?

Under penalties of perjury, I declare that the information I have furnished above is, to the best of my knowledge, true, correct, and complete.

Signature

Date

Cat. No. 10227P

Form W-5 - Earned Income Credit Advance Payment Certificate - 1998

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