The California Earned Income Tax Credit (CalEITC) is a refundable cash back credit for qualified low-to-moderate income working Californians. EITC is widely recognized as one of the nation’s most powerful resources for lifting low-income people out of poverty. Whether under the federal or state program, EITC delivers a much-needed income boost to those stuggling to make ends meet, helping people meet basic needs, while at the same time encouraging work.
In 2015, California established the first-ever CalEITC to extend a new cash back credit to the poorest working families in the state. In 2020, Governor Gavin Newsom has expanded CalEITC to further assist families facing poverty. California has more than doubled the investment in CalEITC to $1 billion, which is estimated to increase the number of participating households from 2 million to 3 million. Plus, the addition of the new Young Child Tax Credit (YCTC) means that qualifying families with children under the age of six can earn an additional $1,000.
The creation and expansion of CalEITC, when combined with the federal EITC, increases the potential value of tax credits available for low-income families to up to $8,000.
More information about CalEITC and how to claim this cash back tax credit can be found through the Franchise Tax Board or by visiting CalEITC4Me.org.
Whether required to file taxes or not, Californians must file their tax returns to qualify for CalEITC. To help you keep every cent of your cash back EITC, local community based organizations are here to help with no-cost IRS certified tax preparation services. Search for the no-cost tax preparation site near you by visiting CalEITC4Me.org/Get-It.
CSD currently administers two grant programs in partnership with the Franchise Tax Board that are designed to increase the number of Californians that claim CalEITC and file their taxes for free. For more information about the CalEITC Education and Outreach Grant and the Free Tax Preparation Assistance Grant, visit CSD Contracting Opportunities.
The Costs of Unclaimed Earned Income Tax Credits to California’s Economy: Update and Expansion of the “Left on the Table” Report (January 2018)