Assemblymembers Mark Stone (D-Monterey Bay) and Eloise Gómez Reyes (D-San Bernardino) have jointly introduced Assembly Bill 2066 to reduce poverty amongst working Californians and to boost local economies. The measure extends the California Earned Income Tax Credit (CalEITC) to families and individuals currently ineligible for the credit, including low-income youth, seniors, and immigrants without Social Security Numbers.
“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,” said Stone.
“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,” said Reyes.
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 some employed or self-employed workers and households with incomes up to $22,300 per year. Eligible working families with children can receive a credit of up to $2,775.
The CalEITC helps mitigate California’s high cost of living for 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 households when they file taxes:
• 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 the age of 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 with Individual Taxpayer Identification Numbers (ITINs) who are excluded from the Cal- and federal EITCs because the current credits are granted only to people in households who have Social Security Numbers valid for work.
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.
WHAT BILL SPONSORS ARE SAYING ABOUT AB 2066:
Peter Manzo, President & CEO of United Ways of California: “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.”
Joe Sanberg, founder of CalEITC4Me, a statewide outreach campaign for CalEITC enrollment: "Every Californian who works should be able to afford life's basic needs -- healthcare, housing, food, transportation, and education. We applaud Assemblymembers Stone and Reyes for their much-needed effort to expand the CalEITC to bring financial security to more low-income working Californians through this effective cash-back tax credit. We have the tools to end poverty in California."
Cynthia Buiza, Executive Director, California Immigrant Policy Center: “AB 2066 strengthens CalEITC by leaving no Californian tax filer behind, regardless of their immigration status. Immigrant workers play an essential role in California's economy, contributing to one-third of our state's GDP as well as billions in federal and state taxes. Excluding low-income immigrant Californians based on the federal EITC design sets back entire families and communities. We can ensure CalEITC works for our state by uplifting low-income immigrant workers. AB 2066 demonstrates California's leadership in advancing just, inclusive, and common sense policies that move our state forward.”
Shimica Gaskins, executive director of Children’s Defense Fund California: “The California Earned Income Tax Credit is one of the most effective tools that we have to address California’s poverty crisis. The Legislature and the Governor have a key opportunity this year to ensure the credit reaches low-income working families and individuals who are currently excluded. By building a more equitable and inclusive CalEITC, we can provide an income boost to more working families who struggle to make ends meet.”