IRS Notice 1015 – IRS Forms, Instructions, Pubs 2026 – As an employer, staying compliant with IRS regulations is crucial for avoiding penalties and supporting your workforce. One key requirement is outlined in IRS Notice 1015, titled “Have You Told Your Employees About the Earned Income Credit (EIC)?” This notice reminds employers of their duty to inform eligible employees about the Earned Income Credit, a valuable refundable tax credit designed to assist low- to moderate-income workers. With tax season approaching in 2026 for the 2025 tax year, understanding Notice 1015 can help you meet federal obligations while potentially benefiting your employees with refunds they might otherwise miss.
In this comprehensive guide, we’ll break down what IRS Notice 1015 entails, who needs to be notified, how to comply, and additional considerations like state-specific rules. This information is based on the latest IRS guidelines to ensure accuracy for 2026 filings.
What Is the Earned Income Credit (EIC)?
The Earned Income Credit (EIC), also known as the Earned Income Tax Credit (EITC), is a federal refundable tax credit aimed at supporting working individuals and families with low to moderate incomes. It was established to offset Social Security taxes and encourage employment, originating from the Tax Reduction Act of 1975. Unlike many deductions, the EIC is refundable, meaning eligible taxpayers can receive a refund even if they owe no taxes or have no filing requirement.
For the 2025 tax year, eligibility depends on factors such as adjusted gross income, filing status, number of qualifying children, and earned income from wages or self-employment. Taxpayers must have a valid Social Security number and meet income thresholds set by the IRS. Even those with no tax withheld can claim it by filing a return, potentially receiving refunds like $800 or more in examples provided by the IRS.
Why Is IRS Notice 1015 Important for Employers?
IRS Notice 1015 serves as a reminder for employers to notify certain employees about the EIC, promoting awareness and helping workers access this benefit. Failure to comply can lead to IRS scrutiny, though the primary goal is employee support. The notice is revised annually; the current version (Rev. December 2025) applies to 2025 wages and 2026 notifications.
Encouraging notification for employees earning less than $68,675 in 2025 can foster goodwill and retention, as it highlights potential tax refunds without affecting most welfare benefits.
Which Employees Must Be Notified About the EIC?
Under federal law, you must notify employees who worked for you at any point during the year and from whose wages you withheld no income tax. However, this does not apply to employees who claimed exemption from withholding on Form W-4, Employee’s Withholding Certificate.
The IRS encourages broader outreach: Notify all employees with 2025 wages under $68,675, as they may qualify for the EIC. This proactive step can help employees file accurately and claim credits they deserve.
How and When to Notify Employees About the EIC?
Compliance with Notice 1015 is straightforward but requires attention to detail. You must provide one of the following to eligible employees:
- IRS Form W-2: The back of Copy B includes required EIC information.
- Substitute Form W-2: Must contain the same EIC details as the official IRS version.
- IRS Notice 797: Titled “Possible Federal Tax Refund Due to the Earned Income Credit (EIC).”
- Your Own Written Statement: Use the exact wording from Notice 797.
Timing is critical:
- If you provide a timely Form W-2 with the EIC info, no additional notice is needed.
- For substitute W-2s without the info, notify within one week of distribution.
- If Form W-2 is late or not required, provide Notice 797 or equivalent by the W-2 due date (typically January 31, 2026) or February 9, 2026, if no W-2 is needed.
Delivery methods matter: Hand the notice directly to the employee or send it via first-class mail to their last known address. Posting on a bulletin board or using interoffice mail doesn’t suffice, though posting can supplement awareness. Electronic delivery may be acceptable in some cases, but confirm with IRS guidelines.
How Employees Can Claim the EIC?
Employees learn basic eligibility from Notice 797. For details, direct them to IRS Publication 596, “Earned Income Credit (EIC),” or the Instructions for Form 1040. They claim the credit on their 2025 tax return, even if no taxes are owed. Filing is required to receive any refund.
State and Local EIC Notification Requirements
Beyond federal rules, several states and localities mandate additional EIC notices. For example:
- California: Notify within one week of providing W-2s or 1099s, plus a second notice in March. Use specific language about eligibility and IRS resources.
- Illinois: Provide Notice 797 or equivalent around W-2 time, updating income thresholds annually.
- Other states like New York, Oregon, and Washington have similar rules, often requiring annual notices in English and other workplace languages.
Check your state’s labor department for specifics, as requirements vary by employee work location. Some states offer their own EIC, enhancing the federal credit.
Additional Resources for Employers and Employees
- Download IRS Notice 1015 and Notice 797 from IRS.gov.
- Visit the IRS EITC Central for toolkits and eligibility checkers.
- Consult Publication 596 for in-depth EIC rules.
By following IRS Notice 1015, you not only comply with federal law but also empower your employees to maximize their tax benefits. If you’re unsure about your obligations, consult a tax professional or the IRS directly. Stay informed—updates to EIC thresholds and rules occur annually, so bookmark reliable sources for future reference.