March 26, 2018
I'm proud to announce that United Ways of California is sponsoring Assembly Bill 2066 to reduce poverty among working Californians and to boost local economies. Assemblymembers Mark Stone (D-Monterey Bay) and Eloise Gómez Reyes (D-San Bernardino) have jointly introduced the measure to extend the California Earned Income Tax Credit (CalEITC) to working families and individuals currently ineligible for the credit, including low-income youth, seniors, and immigrants without Social Security Numbers. United Ways of California is joined by Children’s Defense Fund-CA, California Immigrant Policy Center and Golden State Opportunity Fund as co-sponsors for the bill.
We know that one in three families in California struggle to meet basic living costs, according to United Way of California's Real Cost Measure report. The Earned Income Tax Credit (EITC) is the most effective tool we have for fighting poverty and helping working families and individuals move up the economic ladder. That is why AB 2066 is so critical – following last year's extension to include the self-employed, this bill would extend eligibility to virtually all remaining low-income working Californians who pay taxes and file their tax returns.
The CalEITC, enacted with bipartisan support in 2015, supplements and builds upon the long-running, refundable federal EITC for low- to middle-income working households. The CalEITC covers income-eligible employed or self-employed workers and families with eligible children. Families with eligible children can have incomes up to $22,300 per year. Eligible working families with children can receive a credit of up to $2,775.
Regarding this bill, Assemblymember Mark Stone said, “On paper, the California economy is roaring, but too many Californians continue to experience devastating poverty. Our state needs to take bold steps to reduce the poverty rate and to improve the economic outlook of its impoverished communities. Extending the CalEITC helps accomplish this goal.”
And Assemblymember Eloise Gómez Reyes stated, “Millions of families in our state feel the overwhelming burden of poverty, and although our recent efforts with the CalEITC have helped, there is still more that we can do. Every year, billions of dollars of tax credits are left unused in California, and by expanding access to these, we can continue to help lift families out of poverty.”
The CalEITC helps mitigate California’s high cost of living for working people who live in poverty. But since the state credit is available only to those who are already eligible for the federal EITC, it fails to reach all of California’s poorest workers and their families who file their tax returns.
AB 2066 extends eligibility to the below categories of tax filers:
- Low-income working young adults ages 18-24 who are not otherwise claimed as dependents, ensuring that young adults who lack financial security early in their careers, working students, and former foster youth may participate in the credit.
- Low-income working seniors over age 65 who need access to the credit because of the increasing age of full retirement for Social Security benefits and because of the age group’s high poverty rate.
- Low-income working immigrant families and individuals who file their taxes using the IRS issued Individual Taxpayer Identification Numbers (ITINs) who are currently excluded from the Cal- and federal EITCs. Immigrant Californians, including DACA and TPS recipients, who have a federally assigned Social Security numbers will continue to qualify for CalEITC.
AB 2066 will be considered by the Assembly Revenue and Taxation Committee later this spring. For more information about the CalEITC, see the Franchise Tax Board’s website.