APA Certified Payroll Professional (CPP) Practice Exam

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Which form must employees file annually to take advantage of advance Earned Income Credit (EIC)?

Form W-9

Form W-5

Form W-2

Not available in 2018

To take advantage of the advance Earned Income Credit (EIC), employees must file Form W-5. This form is specifically designed for individuals who qualify for the advance EIC and wish to receive it through their employer via their paycheck.

The correct answer is not "not available in 2018" because, while the advance EIC program was discontinued after 2010, it is important to recognize that prior to its discontinuation, employees utilized Form W-5 for this purpose. The confusion may stem from the current status of the program, but in the context of understanding past regulations, knowing that Form W-5 relates to the advance Earned Income Credit is crucial.

Forms W-9 and W-2 serve different purposes: W-9 is used to provide taxpayer identification information and W-2 is used by employers to report wages paid and taxes withheld. Therefore, neither of these forms applies to the matter of claiming advance EIC.