---
title: "Payroll Credits & Earned Income Credit"
slug: "payroll-credits-earned-income-credit"
updated: 2023-12-26T04:50:48Z
published: 2023-12-26T04:50:48Z
canonical: "www.procaresupport.com/payroll-credits-earned-income-credit"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://www.procaresupport.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Payroll Credits & Earned Income Credit

Credits are the opposite of withholdings and are rarely used. They add money to paychecks rather than subtracting from them. Credits are usually offered through a state or federal program. The Earned Income Tax Credit (known as EITC or just EIC) is one such program. [Embedded content](https://www.youtube.com/embed/4JLscRLi-RA)

## Before You Begin

1. Before assigning any credits to a staff member you’ll want to confirm they meet the requirements for that credit. This most often applies to the Federal Earned Income Credit. Visit [www.irs.gov](https://www.irs.gov) and search for EIC or EITC to learn more. **Important!** Beginning in 2011 EIC is no longer advanced to people on individual paychecks. Therefore it is not necessary to assign the EIC credit to them as the amount added to their checks would be zero. See IRS questions about the [Advance Earned Income Credit](https://www.irs.gov/charities-non-profits/earned-income-credit).
2. The *Credit* you wish to use must exist as a standard formula within Procare or you may set up a custom [Payroll Formula](/procare-desktop/docs/create-a-new-payroll-withholding-formula) and define it as a “credit”. Since credits are rare it is best to confirm the details with your tax advisor then [Contact Support](https://procare-solutions.document360.io/) for assistance with set up. Depending on complexity, fees may apply.

## Getting There

[Look Up an Employee](/procare-desktop/docs/look-up-or-search-for-employee) and click the *Credits* icon (money with plus sign) on the toolbar.

![image](https://s3.amazonaws.com/cdn.procaresoftware.com/pdfs/Support+Site+Images/Desktop/Payroll/Payroll+Credits+%26+Earned+Income+Credit_122023_image+1.jpg)

## Assign Credits to Employee

1. At the *Employee Standard Credits* screen a list of the credits currently assigned to this employee will be displayed. To add credits click *New Credit* (lower left).
2. At the *Credit Editor* you’ll select the credits for this person. Select a *Category* and *Class Name*, usually “Federal” and “EIC”. then click the *Load* button.
3. Type a *Comment* if you wish (optional).
4. Enter a *Value* for any variables that apply to this credit such as a 1, 2, or 3 to indicate the filing status.
5. With the appropriate Values entered for this employee click *Save > Exit* to return to the list of credits assigned to this person. Then click *Exit* once more.  

**Note**: it would be unusual to have any credits other than EIC.