Advance EIC Payment?

Question

I started a new job six weeks ago. Since that time, my apartment lease renewed and I receive federal housing assistance, so my employer received a one page employment verification form from each entity. Today I submitted form W-5 to her requesting advanced earned income tax payments. She called me to her desk in front of everybody and said she can't do it because it's too much government paperwork and neither her or her accountant know anything about it. I explained the program to her and showed her how to set it up in QuickBooks and she freaked out. She said she didn't know where the money was coming from or how she'd get it back. Then she said, this is the third thing I have gotten for you since you started working here. I wish I would have known all this before I hired you. I withdrew my W-5 and told her nevermind and was so humiliated I don't know if I can return to work tomorrow. Why are people allowed to do this and I don't suppose I could complain to anyone that cared?

Answer 1

I believe that your employer has to "honor" your w5... just like the w4. it's an official IRS document.

Also, your employer doesn't need to worry about getting the money back. what happens is when she totals all of the FICA and Federal taxes withheld from all of her employees, the amount of your EIC is subtracted and what's left is the amount that she would deposit to the IRS. there's nothing out of pocket to her. It's not really common but if she wants to be in business and do her own payroll, that's the stuff that comes along with it. what is she going to do when she hires a guy with a child support order? lol

if it's too much for her, maybe she should outsource her payroll... Paychex, ADP...

Hope it works out for you :)

Answer 2

She shouldn't do this.  Your private matters shouldn't be discussed in front of others.  It sounds like you work for a rather small business, so complaining probably won't do much good.  Return to work tomorrow, don't let another person's ignorance cause you to lose out on employment.  Besides I am sure you aren't the first person she has embarrassed.  Even though I think you should return to work, I think you might also want to keep your eye out for another place of employment.

Answer 3

She sounds like a total jerk, frankly.  

Good luck.

Answer 4

The employer can do it and is required to honor a Form W-5.  See Item 10 on Page 18 of the Employers Tax Guide.  

http://www.irs.gov/pub/irs-pdf/p15.pdf