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 ap-
proximately 460,000 California families that quali-
fied, 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 eligi-
bility for the EIC. 
(8) In order to ensure that tax benefits de-
signed to assist working Americans reach the max-
imum 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 po-
tential 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 Rev-
enue Code of 1986 (relating to miscellaneous provisions) 
is amended by adding at the end the following new section: 
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‘‘SEC. 7529. EMPLOYER NOTIFICATION OF AVAILABILITY OF 
EARNED INCOME CREDIT. 
‘‘(a) IN GENERAL.—Every employer required to pro-
vide a statement under section 6051 (relating to W–2 
statements) to a potential EIC-eligible employee shall pro-
vide 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 sec-
tion 32(c)(1)(A)(ii) (or such other amount as may be pre-
scribed by the Secretary). 
‘‘(c) CONTENTS OF NOTICE.— 
‘‘(1) IN GENERAL.—The notice required by sub-
section (a) shall be— 
‘‘(A) a copy of Internal Revenue Service 
Notice 797 or any successor notice, or 
‘‘(B) a notice stating: ‘Based on your an-
nual earnings, you may be eligible to receive the 
earned income credit from the Federal Govern-
ment. The earned income credit is a tax credit 
for certain working individuals and families. In 
2008, earned income credit benefits are avail-
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able 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 ex-
ample, 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 Med-
icaid, 
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 Assist-
ance (VITA) program provides free tax prepa-
ration assistance to individuals under the above 
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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 begin-
ning in a calendar year after 2008— 
‘‘(A) such calendar year shall be sub-
stituted 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 chil-
dren at which the credit phases out under sec-
tion 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 
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any calendar year if the employer employed an aver-
age of 25 or fewer employees on business days dur-
ing 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 ex-
istence throughout such year. 
‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
was not in existence throughout the preceding cal-
endar year, the determination under paragraph (1) 
shall be based on the average number of employees 
that it is reasonably expected such employer will em-
ploy on business days in the current calendar year. 
‘‘(3) SPECIAL RULES.— 
‘‘(A) CONTROLLED
GROUPS.—For pur-
poses 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 em-
ployee at the same time and in the same manner as the 
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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 fol-
lowing 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. 
Æ 
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