Publication 51 |
2001 Tax Year |
Chapter 14 Advance Earned Income Credit (EIC) Payment Methods
To figure the advance EIC payment, you may use either the Wage Bracket Method or the Percentage Method explained below. With either method, the
number of withholding allowances an employee claims on Form W-4 is not used in figuring the advance EIC payment. Nor does it matter that the employee
has claimed exemption from income tax withholding on Form W-4. See section 6 for an explanation of the advance EIC.
Wage Bracket Method
If you use the wage bracket tables on pages 44 through 45, figure the advance EIC payment as follows.
Find the employee's gross wages before any deductions using the appropriate table. There are different tables for (a) single or head of
household, (b) married without spouse filing certificate, or (c) married with both spouses filing certificates. Find the amount
of the advance EIC payment shown in the appropriate table for the amount of wages paid.
Percentage Method
If you do not want to use the wage bracket tables to figure how much to include in an employee's wages for the advance EIC payment, you can use the
percentage computation based on the appropriate rate table.
Find the employee's gross wages before any deductions in the appropriate table on pages 42 through 43. There are different tables for (a)
single or head of household, (b) married without spouse filing certificate, or (c) married with both spouses filing
certificates. Find the amount of the advance EIC payment shown in the appropriate table for the amount of wages paid.
Rounding.
The wage bracket tables for advance EIC payments have been rounded to whole dollar amounts.
If you use the percentage method for advance EIC payments, the payments may be rounded to the nearest dollar. The rules for rounding discussed in
section 13 apply to advance EIC payments.
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