IMPRESSIVE SPIKE IN CAL EITC CLAIMS SET TO FAR OUTPACE 2018
RECORD NUMBERS OF LOW-INCOME WORKERS BENEFITING FROM CA TAX CREDIT
CALIFORNIA — More than 827,000 low-income workers have claimed $180 million through California’s Earned Income Tax Credit (Cal EITC) during the first two months of 2019, which amounts to a 40 percent increase over the number of claims from the same period last year, according to new figures from the Franchise Tax Board.
This spike in claims is reflective of expanded eligibility for the credit, and the state’s continued investment in Cal EITC outreach. For the first time this year, full-time workers making $12 per hour can claim the credit. California is leading the nation as the first state to extend its EITC to adults age 65 and older, and it’s among the few states offering the program to people at the start of their careers — ages 18 to 24.
“We know that the Cal EITC can lift people out of poverty, and these new figures from the Franchise Tax Board show its broadening impact,” said Golden State Opportunity / CalEITC4Me President Josh Fryday, “That impact could become even greater if the Legislature adopts Gov. Gavin Newsom’s proposal to more than double this critical anti-poverty program.”
The economic impact of the Cal EITC is already profound, pumping hundreds of millions of dollars into the state’s economy through income, business sales, new jobs, and tax revenue. For Californians living paycheck to paycheck, the credit can help them afford the rising costs of basic necessities such as housing, health care, food, and transportation. It can be the difference between paying rent on time or incurring a late fee that leads to eviction.
The governor’s proposed budget would expand the Cal EITC to all workers making $15 per hour and give families with children under age 6 an additional $500, allowing an estimated one million more people to benefit from the credit and dramatically increasing its value for families with young children.
In 2018, more than 1.4 million Californians claimed $346 million through the credit between January and October 15, which is the deadline to file an amended income tax return. With five weeks until Tax Day, and more than seven months total left to claim the credit, California is poised to set a new record for Cal EITC claims and cash back in 2019.
CalEITC4Me is the statewide outreach campaign to promote use of this proven anti-poverty measure. Since its inception in 2015, CalEITC4Me has helped more than 2 million people claim $4 billion in state and federal EITC funds. CalEITC4Me’s goal this year is to ensure that as much as $400 million in Cal EITC dollars reach eligible workers, and that more people file for the federal EITC as well.
Thus far in 2019, the average Cal EITC amount is down 14 percent from $253 to $217, reflecting the expanded eligibility for claimants without dependents. The credit is much larger for families with children, and once again this year, close to $9 out of every $10 Cal EITC dollars is going to parents, the FTB figures show.