The state of California has enacted legislation (Assembly Bill 1355) expanding a requirement for employers to notify employees about federal and state earned income tax credits (EITCs). These changes go into effect on notices furnished on or after January 1, 2024.
Employers must inform all employees that they may be eligible for:
- Voluntary Income Tax Assistance (VITA) Program
- CalFile (a free program available online for taxpayers to fill out and e-file state personal income tax returns)
- Federal and state antipoverty tax credits, including the EITCs.
The first notice is due within one week of an employer providing an annual wage summary to an employee. It can be provided a week before or a week after.
It is required for employers to provide the first notice by handing it directly to the employee or mailing it to the last known address.
Notwithstanding the above, the employer is permitted to send the first notice to an email account of the employee’s choosing if the employee affirmatively, and by electronic acknowledgment or in writing, opts in to receive electronic materials or statements.
Employers must also send a second notice to all employees in the month of March during the same year.
This second notice may be sent electronically.
For additional details:
Read more about this legislation.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.
