Wednesday, March 17, 2010
House Passes Earned Income Credit Notification Bill
The House of Delegates passed the Earned Income Credit notification bill (HB 755) by a vote of 87-51.
The bill, which the Chamber opposes, would require the Comptroller to annually publish the maximum income eligibility for the state’s earned income credit and a notice to employees regarding the federal and state credits. Employers would be required to identify employees who may be eligible for the credit and provide them with a copy of the comptroller’s notice.
“We believe it’s the responsibility of the state, not employers to identify individuals potentially eligible for the earned income credit,” Maryland Chamber Vice President of Government Affairs Ron Wineholt said. “Employers should not be put into the position of being their employees’ tax advisors for this credit, or the many other credits that could follow in future years.”
The Chamber opposes the bill for three reasons:
Duplicative Notice: Federal law already requires employers to notify employees of their possible eligibility for the federal earned income credit if they have no taxes withheld. This bill would result in a duplicative notice requirement for employers.
Trouble Determining Who Gets the Notice: In order for employers to distribute the notice to “an employee who may be eligible,” an employer would need to know information about qualifying factors like the adjusted gross income for the family, the employee’s income tax filing status, and the number of the employee’s “qualified” children. In order to comply with the bill, employers would have to provide notice to all employees or to employees below certain wage levels, who may qualify. The Chamber believes either option is a bad choice due to the time, cost and privacy issues involved.
No Notice to Employers: We understand that the Comptroller’s office plans to post the required income eligibility information and employer notice to its website. If employers don’t receive a mailing or direct notification from the Comptroller’s office, it’s likely that many will never learn of the new requirements.
Action now moves to the Senate Budget and Taxation Committee, which heard the Senate version of the bill earlier this month. For more information, contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
