IRS Notice 797 Poster: Delivery Rules, Deadlines, and Penalties

Under IRS Notice 797, employer requirements are straightforward but easy to miss: every employer that files Form W-2 must deliver an individual written EITC notice to each employee who had no federal income tax withheld from wages during the year. The requirement comes from Internal Revenue Code Section 6051 and Treasury Regulation 31.6051-1, and despite the common “poster” shorthand, tacking a flyer to the break-room wall does not satisfy it. The notice has to reach the employee directly, on time, in one of a few approved forms.¹

Which Employees Trigger the Notice

You must notify any employee who earned wages during the calendar year but had zero federal income tax withheld from those wages. That covers three overlapping groups: employees whose earnings were too low to trigger withholding, employees whose W-4 elections eliminated withholding, and employees who claimed complete exemption from withholding under Section 3402(n) on their W-4.¹

The IRS also encourages, but does not require, notifying every employee whose 2025 wages fell below $68,675 (married filing jointly) or $61,555 (other filers), since those workers may qualify for the credit even if some tax was withheld.²

What Counts as Delivery

You have three ways to satisfy the requirement.

The easiest is the standard IRS Form W-2 itself. Copy B already carries the required EITC language on its back. Furnish the IRS version of Copy B on time and no separate notice is needed.²

If you issue a substitute W-2, check whether your version reproduces the EIC wording on the back of the employee’s copy. If it does, you’re covered. If it doesn’t, you have to hand the employee one of the following:

IRS Notice 797, the official one-page notice titled “Possible Federal Tax Refund Due to the Earned Income Credit (EIC),” downloadable from IRS.gov.³
An employer-drafted statement that reproduces the wording of Notice 797 exactly. Paraphrasing or summarizing is not enough.¹

Posting Does Not Count

Whatever form you use, it must be handed directly to the employee or sent by first-class mail to the employee’s last known address. Posting Notice 797 on a bulletin board, routing it through interoffice mail, or sending it in a company-wide email blast does not satisfy the legal requirement.² The IRS does encourage employers to post the notice as a supplement, since some employees may see it there who wouldn’t otherwise pay attention to a mailed statement.

Electronic Delivery

If you furnish W-2s electronically with the employee’s consent, and the electronic Copy B carries the required EIC information, that satisfies the notice through the W-2 itself. The IRS has not issued specific guidance authorizing email or portal delivery of a standalone Notice 797 as a substitute for hand delivery or first-class mail. When the W-2 you send does not carry the EIC language, the safest approach is to hand-deliver or mail the separate notice.

Deadlines

The deadline depends on whether the employee gets a W-2 at all.

Employees receiving a timely W-2: deliver the notice within one week before or one week after the W-2. If you miss the W-2 deadline, the EITC notice is due no later than the W-2’s required furnishing date, January 31.⁴
Employees receiving a substitute W-2 without EIC language: deliver the notice within one week of furnishing that substitute W-2.²
Employees not required to receive a W-2: the notice is due by February 7 of the following year. When that date falls on a weekend, the deadline shifts to the next business day. For the 2025 tax year, the deadline is February 9, 2026.²

Most employers just deliver the notice at the same time they issue W-2s in late January. Treating it as a single task removes the risk of missing a separate deadline.

Household Employers Are Included

If you employ a nanny, housekeeper, caregiver, or other household worker, the rules apply to you too. You must give the notice when you agreed to withhold federal income tax from the employee’s wages but the withholding tables show no tax should be withheld.⁵ The same delivery options apply: a W-2 Copy B carrying the EIC language, or Notice 797, or a substitute with identical wording.

Recordkeeping

The IRS requires employers to keep all employment tax records for at least four years after the fourth-quarter return is filed for the year.⁶ That includes proof of EITC notification. Keep evidence for each qualifying employee: a signed acknowledgment, a mailing receipt, or a log showing that a W-2 with the EIC language was furnished on a specific date. A simple spreadsheet with name, delivery method, and date is enough. The IRS also recommends keeping any employee W-2 copies that come back as undeliverable; the returned envelope documents that you attempted delivery to the last known address.

Penalties

Failure to furnish the EITC notice is treated as a failure to provide a correct payee statement under Internal Revenue Code Section 6722.⁷ Penalties are assessed per employee and adjusted for inflation each year. For statements due in 2026:⁸

Corrected within 30 days of the deadline: $60 per statement
Corrected after 30 days but by August 1: $130 per statement
Not corrected by August 1 or never furnished: $340 per statement
Intentional disregard: $680 per statement, with no annual cap

Annual Caps by Business Size

Employers with average annual gross receipts of $5 million or less over the prior three tax years qualify for lower annual maximums:⁹

Corrected within 30 days: $239,000 cap
Corrected by August 1: $683,000 cap
After August 1 or never furnished: $1,366,000 cap

Larger employers face higher annual maximums. The base statutory cap is $3,000,000 before inflation adjustment, and the 2026 figure is higher.⁷ For intentional disregard, no annual cap applies at any business size. An employer that has a compliance process and misses a few employees looks very different from one that has never bothered with the requirement; the second is a much easier target for the higher tiers.

State Rules May Add Requirements

Several states have enacted their own EITC notification rules on top of the federal requirement. Some mandate a separate state-specific notice covering both federal and state credits; some require workplace posting in addition to individual delivery. These requirements vary and change often, so employers operating in more than one state should check with the state labor department or tax agency each year to confirm what is needed beyond federal Notice 797.

1
GovInfo. Internal Revenue Service, Treasury 31.6051-1
2
Internal Revenue Service. Notice 1015 (Rev. December 2025) – Have You Told Your Employees About the Earned Income Credit (EIC)?
3
Internal Revenue Service. Notice 797 (Rev. September 2025) – Possible Federal Tax Refund Due to the Earned Income Credit (EIC)
4
eCFR. 26 CFR 31.6051-1 – Statements for Employees
5
Internal Revenue Service. Publication 926, Household Employer’s Tax Guide
6
Internal Revenue Service. Employment Tax Recordkeeping
7
Office of the Law Revision Counsel. 26 USC 6722 – Failure to Furnish Correct Payee Statements
8
Internal Revenue Service. Information Return Penalties
9
Internal Revenue Service. 20.1.7 Information Return Penalties