Program to Protect California Children and Families
Sacramento, CA — Advocates with the California Earned Income Tax Credit (CalEITC) Coalition, which includes low-income service providers, labor representatives, and community and faith-based organizations, today praised California Senate Democrats’ Protect Our Progress Budget Plan for strengthening the California Earned Income Tax Credit (CalEITC). Senate Democrats’ budget plan proposes to provide a $275 minimum credit, putting urgently needed cash back in the pockets of millions of Californians with low-incomes who are struggling to make ends meet.
“The CalEITC is one of the most effective, anti-poverty tools in the state, and boosting the CalEITC minimum is a smart investment,” said Pete Manzo, President & CEO of United Ways of California. “We’re thrilled to see the Senate 2023 Budget Plan prioritizes meaningful, targeted tax credits like the CalEITC. A $275 CalEITC minimum would help over 3 million households cover groceries, utility bills, and more. We continue to call on the Legislature and the Governor to prioritize poverty-fighting programs that work, and as advocates for a more equitable California, we’re here to support.”
“With the current CalEITC minimum at just $1, many CalEITC eligible people don’t have an incentive to file their taxes. Yet $275 would make a world of difference to people living paycheck to paycheck,” said Amy Everitt, President of Golden State Opportunity. “It’s time for the Legislature to do the right thing and make the CalEITC work for everyone who qualifies.”
“We applaud the Senate for recognizing the importance of our state’s targeted, low-income tax credits and for their proposal to raise the CalEITC minimum to $275. Majority of CalEITC eligible filers receive far less than $275 from the credit, and it is time we make the amount more meaningful to Californians, who at times qualify for a meager $1,” said Shimica Gaskins, President & CEO of GRACE/End Child Poverty in California. “We know the CalEITC and YCTC successfully reduce poverty and deliver economic justice for millions of Californians and look forward to working alongside the Legislature to strengthen these vital support systems.”
The CalEITC Coalition has championed establishing minimum CalEITC tax credit of $300 per family through AB 1498 (Gipson) and expanding the $1,083 Young Child Tax Credit (YCTC) to all CalEITC-eligible families through AB 1128 (Santiago) to provide much needed financial relief for families who are living on the edge of poverty.
The CalEITC and YCTC are two of California’s most effective tax credit programs to help families with low incomes afford basic needs like food, rent, utilities and childcare. Advocates say that expanding CalEITC and YCTC this year will provide a crucial lifeline to even more Californians with low incomes who are already struggling to make ends meet and whose economic pressures have intensified with the expiration of several pandemic-era federal financial supports that helped reduce poverty to historic levels.
According to a recent California Budget & Policy Center report, about half of tax filers without children in the home receive a CalEITC of less than $100 with a minimum credit of $1. They also estimate that nearly all CalEITC recipients (88%) got less than $300 from the credit in tax year 2021, with 79% getting less than $200 and 43% getting less than $100. Further, the report found that about 3 out of 4 California workers who are likely eligible for the CalEITC are people of color, including about half who are Latinx, 11% who are Asian, and 7% who are Black. In addition, about 35% of California workers who likely qualify for the credit are immigrants, and 52% are women. Investing in the CalEITC can serve as a vital tool to reduce high poverty rates among families of color while promoting racial and gender equity, advocates say.
The CalEITC Coalition is a broad group of 35+ advocacy and community-based organizations, including policy advocates, low-income service providers, and labor representatives, committed to expanding access to the CalEITC, YCTC and other cash-back tax credits.