When a taxpayer receives advanced EIC, who pays for it? What I mean, does the employer pay directly to the employee and then the employer is re-imbursed from?????

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>>does the employer pay directly to the employee and then the employer is re-imbursed from?????<<

According to Circular E Employer's tax guide, "Generally, employers will make the advance EIC payment from withheld income tax and employee and employer social security and Medicare taxes.... advance EIC payments are treated as deposits of these taxes."

If the EIC payments exceed the other taxes, the employer can choose either to reduce the EIC or to claim an advance deposit of payroll taxes. See the instructions to Form 941.

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Thank you so very much.

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There's an adjustment on the 941 which allows the EIC to be deducted from the p/r taxes owed.

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