[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6371 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 6371
To amend the Internal Revenue Code of 1986 to require employers to
notify their employees of the availability of the earned income credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 25, 2008
Mr. Emanuel (for himself, Mr. Crowley, Mr. Kind, Ms. Schwartz, Mr.
Levin, Ms. Sutton, Mr. Filner, and Mr. Bishop of New York) introduced
the following bill; which was referred to the Committee on Ways and
Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to require employers to
notify their employees of the availability of the earned income credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Earned Income Credit Information Act
of 2008''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress hereby finds:
(1) President Gerald Ford and Congress created the earned
income credit (EIC) in 1975 to offset the adverse effects of
Social Security and Medicare payroll taxes on working poor
families and to encourage low-income workers to seek employment
rather than welfare.
(2) President Ronald Reagan described the earned income
credit as ``the best anti-poverty, the best pro-family, the
best job-creation measure to come out of Congress.''
(3) Over the last 30 years, the EIC program has grown into
the largest Federal anti-poverty program in the United States.
In 2005, 22.8 million tax filers received $42.4 billion in tax
credits through the EIC program.
(4) In 2007, the EIC provided a maximum Federal benefit of
$4,716 for families with 2 or more children, $2,853 for
families with a single child, and $428 for a taxpayer with no
qualifying children.
(5) Based on analysis conducted by the General
Accountability Office, 25 percent of those eligible to receive
the EIC do not take advantage of the tax benefit.
(6) Based on analysis conducted by the Joint Economic
Committee, working Americans may have lost out on approximately
$8 billion in unclaimed earned income credits in 2004.
(7) In response to a study by the California Franchise Tax
Board that found that there were approximately 460,000
California families that qualified, but did not file, for the
EIC, Governor Arnold Schwarzenegger signed into law Assembly
Bill 650, the Earned Income Tax Credit Information Act, on
October 13, 2007. The law requires that California employers
notify employees of their potential eligibility for the EIC.
(8) In order to ensure that tax benefits designed to assist
working Americans reach the maximum number of people, the
Federal Government should enact a similar law.
(b) Purpose.--The purpose of this Act is to inform the greatest
possible number of Americans about their potential eligibility for the
earned income credit in a way that is neither costly nor burdensome for
employers or the Government.
SEC. 3. EMPLOYER NOTIFICATION OF AVAILABILITY OF EARNED INCOME CREDIT.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986
(relating to miscellaneous provisions) is amended by adding at the end
the following new section:
``SEC. 7529. EMPLOYER NOTIFICATION OF AVAILABILITY OF EARNED INCOME
CREDIT.
``(a) In General.--Every employer required to provide a statement
under section 6051 (relating to W-2 statements) to a potential EIC-
eligible employee shall provide to such employee the notice described
in subsection (c).
``(b) Potential EIC-Eligible Employee.--For purposes of this
section, the term `potential EIC-eligible employee' means any
individual whose annual wages from the employer are less than the
amount of earned income (as defined in section 32(c)(2)) at which the
credit under section 32(a) phases out for an individual described in
section 32(c)(1)(A)(ii) (or such other amount as may be prescribed by
the Secretary).
``(c) Contents of Notice.--
``(1) In general.--The notice required by subsection (a)
shall be--
``(A) a copy of Internal Revenue Service Notice 797
or any successor notice, or
``(B) a notice stating: `Based on your annual
earnings, you may be eligible to receive the earned
income credit from the Federal Government. The earned
income credit is a tax credit for certain working
individuals and families. In 2008, earned income credit
benefits are available for taxpayers with earnings up
to $38,646 ($41,646 if married filing jointly).
Eligibility and benefit amounts vary according to
filing status (single or married), number of qualifying
children, and other sources of income. For example, in
2008, earned income credit benefits are available for
childless taxpayers earning less than $15,880,
taxpayers with 1 child earning less than $36,995, and
taxpayers with 2 or more children earning less than
$41,646. In most cases, earned income credit payments
will not be used to determine eligibility for Medicaid,
supplemental security income, food stamps, low-income
housing or most temporary assistance for needy families
programs. Even if you do not owe Federal taxes, you may
qualify, but must file a tax return to receive the
earned income credit. For information regarding your
eligibility to receive the earned income credit,
contact the Internal Revenue Service by calling 1-800-
829-1040 or through its web site at www.irs.gov. The
Volunteer Income Tax Assistance (VITA) program provides
free tax preparation assistance to individuals under
the above income limits. Call the IRS at 1-800-906-9887
to find sites in your area.'.
``(2) Years after 2008.--In the case of the notice in
paragraph (1)(B) for taxable years beginning in a calendar year
after 2008--
``(A) such calendar year shall be substituted for
`2008',
``(B) the lowest amount of earned income for a
taxpayer with no qualifying children at which the
credit phases out under section 32(a)(2)(B) for taxable
years beginning in such calendar year shall be
substituted for `$15,880',
``(C) the lowest amount of earned income for a
taxpayer with 1 qualifying child at which the credit
phases out under section 32(a)(2)(B) for such taxable
years shall be substituted for `$36,995', and
``(D) the lowest amount of earned income for a
taxpayer with 2 or more qualifying children at which
the credit phases out under section 32(a)(2)(B) for
such taxable years shall be substituted for `$41,646'.
``(d) Exemption for Small Employers.--
``(1) In general.--An employer shall not be required to
provide notices under this section during any calendar year if
the employer employed an average of 25 or fewer employees on
business days during the preceding calendar year. For purposes
of the preceding sentence, a preceding calendar year may be
taken into account only if the employer was in existence
throughout such year.
``(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
preceding calendar year, the determination under paragraph (1)
shall be based on the average number of employees that it is
reasonably expected such employer will employ on business days
in the current calendar year.
``(3) Special rules.--
``(A) Controlled groups.--For purposes of this
subsection, all persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414
shall be treated as 1 employer.
``(B) Predecessors.--Any reference in this
subsection to an employer shall include a reference to
any predecessor of such employer.
``(e) Timing and Manner of Notice.--The notice required by
subsection (a) shall be provided to each employee at the same time and
in the same manner as the employer statement is furnished to each such
employee under section 6051.''.
(b) Penalty for Failure To Provide Notice.--Section 6724(d)(2) of
such Code is amended by striking ``or'' at the end of subparagraph
(BB), by striking the period at the end of subparagraph (CC) and
inserting ``, or'', and by inserting after subparagraph (CC) the
following new subparagraph:
``(DD) section 7529 (relating to employer
notification of availability of earned income
credit).''.
(c) Clerical Amendment.--The table of sections for such chapter 77
is amended by adding at the end the following new item:
``Sec. 7529. Employer notification of availability of earned income
credit.''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to statements required to be provided under section
6051 of the Internal Revenue Code of 1986 more than 180 days after the
date of the enactment of this Act.
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