Year-End Notification Requirements

You must provide employees with a federal Wage and Tax Statement (Form W-2) by January 31 (or next business day if it is a weekend or holiday). If you do not provide a Form W-2 to each employee, or you give false or fraudulent statements, you will be fined.

Tax Code

• California Unemployment Insurance Code – section 13050 
• California Unemployment Insurance Code – section 13052 
• California Unemployment Insurance Code – section 13052.5 
• Revenue and Taxation Code – section 17041 

For More Information

You can find IRS Form W-2 reporting requirements and instructions:

• Employer’s Tax Guide (Publication 15, Circular E)
• Instructions for Forms W-2 and W-3 (PDF)
• Forms, Instructions and Publications - IRS website.

For help with state information on Form W-2, refer to the California Employer’s Guide (DE 44) (PDF) or contact us at 1-888-745-3886. If the employee performs services in more than one state, contact the other state for guidance.

Employee Notification Is Required

Employers who are subject to, and required to provide, Unemployment Insurance to their employees must provide EITC notification to the employee by either handing it directly to the employee, mailing it to the employee’s last known address, or providing it via email if an employee opts into receipt of electronic statements or materials. Posting of this information on an employee bulletin board will not satisfy the notification requirement. For more information, refer to Assembly Bill 1355.

The notification will be provided within one week before, after, or during the time the employer provides an annual wage summary, including, but not limited to, Forms W-2 or 1099, to the employee. The notice will include instructions on how to obtain any notices available from the IRS for this purpose, including, but not limited to, the IRS Notice 797 or any successor notice or form, or any notice created by you as long as it contains substantially the same language as the notice below.

“Based on your annual earnings, you may be eligible to receive the earned income tax credit from the federal government. The earned income tax credit is a refundable federal income tax credit for low-income working individuals and families. The earned income tax credit has no effect on certain welfare benefits. In most cases, earned income tax credit payments will not be used to determine eligibility for Medicaid, supplemental security income, food stamps, low-income housing, or most temporary assistance for needy families’ payments. Even if you do not owe federal taxes, you must file a tax return to receive the earned income tax credit. Be sure to fill out the earned income tax credit form in the federal income tax return booklet. For information regarding your eligibility to receive the earned income tax credit, including information on how to obtain the IRS Notice 797, or any other necessary forms and instructions, visit the IRS (irs.gov) or contact the IRS at 1-800-829-3676.”

Refer to EITC Information for Employers for more information. .

EITC Awareness Day

January 26 is Earned Income Tax Credit Awareness Day. EITC Awareness Day is a national grassroots effort focusing on this valuable federal tax credit. Joining the IRS in this effort are charitable organizations, elected officials, state and local governments, employers, and local communities nationwide.

We encourage California taxpayers to learn more about Earned Income Tax Credit to know if they are eligible for this refundable credit on their federal tax return. Free tax preparation sites are available to help you file and claim the credit.

California Earned Income Tax Credit

The refundable California EITC is available to low-income working individuals who earned wage income subject to California withholding and/or have net earnings from self-employment. This credit is similar to the federal Earned Income Credit (EIC) but with different income limitations. To claim the California EITC, you must file a California income tax return and attach a completed California Earned Income Tax Credit (FTB 3514) form. For information on the availability of the credit, eligibility requirements, and how to obtain the necessary California tax forms or get help filing, visit the Franchise Tax Board or call 1-800-852-5711.

Individuals, partnerships, corporations, or other organizations involved in a trade or business in California may be required to report independent contractor payments.

Avoid Penalties

If required, you must provide an information return (Form 1099) to an independent contractor by January 31 (or the next business day if it is a weekend or holiday), or you will have to pay a penalty.

Tax Code

• California Unemployment Insurance Code – section 13052.5
• Revenue and Taxation Code – section 19175
• Revenue and Taxation Code – section 17041 

For More Information

You can find IRS Form 1099 reporting requirements and instructions:

• Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3922, 5498, and W-2G (IRS Publication 1220) (PDF) – Form 1099 reporting requirements and instructions.
• General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S (IRS Publication 1179) (PDF) – Rules for substitute statements if you don’t use a Form 1099.
• Forms, Instructions and Publications - IRS website.