What is a W-5?
Employees used Form W-5 to request advance payment of a portion of their earned income credit (EIC) with their pay.
The earned income credit is a tax credit for low to moderate-income working individuals and families. The credit can reduce the tax owed and may result in a refund. An eligible employee might choose to receive a portion of their EIC as an advance payment throughout the year by completing Form W-5 and submitting it to their employer.
Form W-5 is obsolete and is no longer used by the Internal Revenue Service (IRS) to request advance payment of the Earned Income Credit (EIC). The last year the IRS accepted the form was 2010, after which it was replaced by the option to claim the EIC on the employee’s tax return.
If an employee is eligible for the EIC, they can claim it on their annual tax return by completing and filing Form 1040, 1040-SR, or 1040-NR. The EIC is a refundable tax credit, meaning that it can reduce the amount of tax owed and may also result in a refund, even if the employee’s tax liability is zero.
In summary, Form W-5 was a form used by eligible employees to request advance payment of a portion of their earned income credit (EIC) with their pay. Form W-5 is obsolete and is no longer used for requesting advance payment of the EIC. Eligible employees can claim the EIC on their annual tax return by filing Form 1040, 1040-SR, or 1040-NR.