W-5 form, also known as Earned Income Credit Advance Payment Certificate, was an IRS tax form. Employees used to submit it to receive a portion of the Earned Income Credit (EIC) in advance with their pay.
The W-5 form was last used in 2010, the last year when the Earned Income Credit could be received before filing a form 1040.
What is Earned Income Credit (EIC)?
The United States earned income credit, also known as the federal income tax credit, is a refundable tax credit. It's a tool to help low- to moderate-income taxpayers, individuals, couples, and particularly those with children.
If taxpayers are eligible for Earned Income Credit (EIC), they will receive a reduction in their tax liability. In some cases, an EIC-eligible taxpayer can receive a refund without paying any income tax.
What is a 1040 Form?
Form 1040, officially known as the "U.S. Individual Income Tax Return," is an IRS tax form. It is used for personal federal income tax returns filed by residents of the United States. The government uses the 1040 Form to calculate the taxpayer's total taxable income and how much the government needs to refund or pay.
As of the 2018 tax year, the 1040 form is the only form accepted by the IRS for personal (individual) federal income tax returns.