Setting up Earned Income Credit (EIC)

The instructions in this help topic apply only for creating a 2010 paycheck. The Earned Income Credit (EIC) was repealed on January 1, 2011. This is part of the Education Jobs Act of 2010 (HR 1586). For checks with a pay date in 2011, the Earned Income Credit is no longer calculated.

Note: If you create a paycheck in 2010, the EIC tax is still calculated.

unavailable in ajeraCore unless you have the Payroll add-on

If employees are eligible for the Earned Income Credit (EIC)Closed A tax credit for certain people who have earned income under an amount established by the IRS. With in-house payroll in Ajera, you can set up eligible employees to receive an advance credit in their paychecks., you can set up employees to receive this advance credit in their paychecks. You first set up the credit and then apply it to the employee.

To set up Earned Income Credit

  1. From the > Setup menu, click Company > Payroll Setup > Taxes.
  2. Click (Customize), and select the Status check box. Click OK.
  3. In the Status column, select All.
  4. Double-click the row for the Earned Income Credit.
  5. In the Status field, select Active to make it available to use for your employees.
  6. Click Save.
  7. Click Close.
  8. Determine which employees are eligible for the Earned Income Credit. You may need to review your Federal Circular E for information about employee eligibility.
  9. From the > Setup menu, click Employees.
  10. Double-click the employee for whom you want to apply the Earned Income Credit.
  11. Click the Payroll Taxes tab.
  12. In the EIC Status field, select the appropriate EIC status.
  13. Click Save.
  14. Set up any other employees for EIC by repeating Steps 10-13.
  15. Click Close.