II 

110TH CONGRESS 

2D SESSION S. 3190 

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 SENATE OF THE UNITED STATES 

JUNE 25, 2008 

Mr. SCHUMER introduced the following bill; which was read twice and referred 

to the Committee on Finance 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Earned Income Credit 

5 Information Act of 2008’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Congress hereby finds: 

8 (1) President Gerald Ford and Congress cre9 ated the earned income credit (EIC) in 1975 to off10 set the adverse effects of Social Security and MediVerDate Aug 31 2005 23:38 Jun 26, 2008 Jkt 069200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3190.IS S3190

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1 care payroll taxes on working poor families and to 

2 encourage low-income workers to seek employment 

3 rather than welfare. 

4 (2) President Ronald Reagan described the 

5 earned income credit as ‘‘the best anti-poverty, the 

6 best pro-family, the best job-creation measure to 

7 come out of Congress.’’ 

8 (3) Over the last 30 years, the EIC program 

9 has grown into the largest Federal anti-poverty pro10 gram in the United States. In 2005, 22.8 million tax 

11 filers received $42.4 billion in tax credits through 

12 the EIC program. 

13 (4) In 2007, the EIC provided a maximum 

14 Federal benefit of $4,716 for families with 2 or 

15 more children, $2,853 for families with a single 

16 child, and $428 for a taxpayer with no qualifying 

17 children. 

18 (5) Based on analysis conducted by the General 

19 Accountability Office, 25 percent of those eligible to 

20 receive the EIC do not take advantage of the tax 

21 benefit. 

22 (6) Based on analysis conducted by the Joint 

23 Economic Committee, working Americans may have 

24 lost out on approximately $8 billion in unclaimed 

25 earned income credits in 2004. 


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1 (7) In response to a study by the California 

2 Franchise Tax Board that found that there were ap3 proximately 460,000 California families that quali4 fied, but did not file, for the EIC, Governor Arnold 

5 Schwarzenegger signed into law Assembly Bill 650, 

6 the Earned Income Tax Credit Information Act, on 

7 October 13, 2007. The law requires that California 

8 employers notify employees of their potential eligi9 bility for the EIC. 

10 (8) In order to ensure that tax benefits de11 signed to assist working Americans reach the max12 imum number of people, the Federal Government 

13 should enact a similar law. 

14 (b) PURPOSE.—The purpose of this Act is to inform 

15 the greatest possible number of Americans about their po16 tential eligibility for the earned income credit in a way 

17 that is neither costly nor burdensome for employers or the 

18 Government. 

19 SEC. 3. EMPLOYER NOTIFICATION OF AVAILABILITY OF 

20 EARNED INCOME CREDIT. 

21 (a) IN GENERAL.—Chapter 77 of the Internal Rev22 enue Code of 1986 (relating to miscellaneous provisions) 

23 is amended by adding at the end the following new section: 


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1 ‘‘SEC. 7529. EMPLOYER NOTIFICATION OF AVAILABILITY OF 

2 EARNED INCOME CREDIT. 

3 ‘‘(a) IN GENERAL.—Every employer required to pro4 vide a statement under section 6051 (relating to W–2 

5 statements) to a potential EIC-eligible employee shall pro6 vide to such employee the notice described in subsection 

7 (c). 

8 ‘‘(b) POTENTIAL EIC-ELIGIBLE EMPLOYEE.—For 

9 purposes of this section, the term ‘potential EIC-eligible 

10 employee’ means any individual whose annual wages from 

11 the employer are less than the amount of earned income 

12 (as defined in section 32(c)(2)) at which the credit under 

13 section 32(a) phases out for an individual described in sec14 tion 32(c)(1)(A)(ii) (or such other amount as may be pre15 scribed by the Secretary). 

16 ‘‘(c) CONTENTS OF NOTICE.— 

17 ‘‘(1) IN GENERAL.—The notice required by sub18 section (a) shall be— 

19 ‘‘(A) a copy of Internal Revenue Service 

20 Notice 797 or any successor notice, or 

21 ‘‘(B) a notice stating: ‘Based on your an22 nual earnings, you may be eligible to receive the 

23 earned income credit from the Federal Govern24 ment. The earned income credit is a tax credit 

25 for certain working individuals and families. In 

26 2008, earned income credit benefits are availVerDate Aug 31 2005 23:38 Jun 26, 2008 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3190.IS S3190

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1 able for taxpayers with earnings up to $38,646 

2 ($41,646 if married filing jointly). Eligibility 

3 and benefit amounts vary according to filing 

4 status (single or married), number of qualifying 

5 children, and other sources of income. For ex6 ample, in 2008, earned income credit benefits 

7 are available for childless taxpayers earning less 

8 than $15,880, taxpayers with 1 child earning 

9 less than $36,995, and taxpayers with 2 or 

10 more children earning less than $41,646. In 

11 most cases, earned income credit payments will 

12 not be used to determine eligibility for Med13 icaid, supplemental security income, food 

14 stamps, low-income housing or most temporary 

15 assistance for needy families programs. Even if 

16 you do not owe Federal taxes, you may qualify, 

17 but must file a tax return to receive the earned 

18 income credit. For information regarding your 

19 eligibility to receive the earned income credit, 

20 contact the Internal Revenue Service by calling 

21 1–800–829–1040 or through its web site at 

22 www.irs.gov. The Volunteer Income Tax Assist23 ance (VITA) program provides free tax prepa24 ration assistance to individuals under the above 


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1 income limits. Call the IRS at 1–800–906–9887 

2 to find sites in your area.’. 

3 ‘‘(2) YEARS AFTER 2008.—In the case of the 

4 notice in paragraph (1)(B) for taxable years begin5 ning in a calendar year after 2008— 

6 ‘‘(A) such calendar year shall be sub7 stituted for ‘2008’, 

8 ‘‘(B) the lowest amount of earned income 

9 for a taxpayer with no qualifying children at 

10 which the credit phases out under section 

11 32(a)(2)(B) for taxable years beginning in such 

12 calendar year shall be substituted for ‘$15,880’, 

13 ‘‘(C) the lowest amount of earned income 

14 for a taxpayer with 1 qualifying child at which 

15 the credit phases out under section 32(a)(2)(B) 

16 for such taxable years shall be substituted for 

17 ‘$36,995’, and 

18 ‘‘(D) the lowest amount of earned income 

19 for a taxpayer with 2 or more qualifying chil20 dren at which the credit phases out under sec21 tion 32(a)(2)(B) for such taxable years shall be 

22 substituted for ‘$41,646’. 

23 ‘‘(d) EXEMPTION FOR SMALL EMPLOYERS.— 

24 ‘‘(1) IN GENERAL.—An employer shall not be 

25 required to provide notices under this section during 


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1 any calendar year if the employer employed an aver2 age of 25 or fewer employees on business days dur3 ing the preceding calendar year. For purposes of the 

4 preceding sentence, a preceding calendar year may 

5 be taken into account only if the employer was in ex6 istence throughout such year. 

7 ‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE8 CEDING YEAR.—In the case of an employer which 

9 was not in existence throughout the preceding cal10 endar year, the determination under paragraph (1) 

11 shall be based on the average number of employees 

12 that it is reasonably expected such employer will em13 ploy on business days in the current calendar year. 

14 ‘‘(3) SPECIAL RULES.— 

15 ‘‘(A) CONTROLLED GROUPS.—For pur16 poses of this subsection, all persons treated as 

17 a single employer under subsection (b), (c), 

18 (m), or (o) of section 414 shall be treated as 1 

19 employer. 

20 ‘‘(B) PREDECESSORS.—Any reference in 

21 this subsection to an employer shall include a 

22 reference to any predecessor of such employer. 

23 ‘‘(e) TIMING OF NOTICE.—The notice required by 

24 subsection (a) shall be provided to each employee at the 


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1 same time the employer statement is furnished to each 

2 such employee under section 6051. 

3 ‘‘(f) MANNER OF PROVIDING NOTICE.—The notice 

4 required by subsection (a) shall be provided either by hand 

5 or by mail to the address used to provide the statement 

6 under section 6051 to the employee.’’. 

7 (b) PENALTY FOR FAILURE TO PROVIDE NOTICE.— 

8 Section 6724(d)(2) of such Code is amended by striking 

9 ‘‘or’’ at the end of subparagraph (BB), by striking the 

10 period at the end of subparagraph (CC) and inserting ‘‘, 

11 or’’, and by inserting after subparagraph (CC) the fol12 lowing new subparagraph: 

13 ‘‘(DD) section 7529 (relating to employer 

14 notification of availability of earned income 

15 credit).’’. 

16 (c) CLERICAL AMENDMENT.—The table of sections 

17 for such chapter 77 is amended by adding at the end the 

18 following new item: 

‘‘Sec. 7529. Employer notification of availability of earned income credit.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply with respect to statements required 

21 to be provided under section 6051 of the Internal Revenue 

22 Code of 1986 more than 180 days after the date of the 

23 enactment of this Act. 

Æ 


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