By Assemblymember Phil Ting–
It sounds unbelievable, but it’s unfortunately true. Low-wage Californians leave roughly $2 billion in refunds on the table because they don’t claim their state and federal Earned Income Tax Credit, or EITC. The key to getting this cash back is to file a tax return. Many miss out on California’s EITC (CalEITC) refund because they don’t typically earn enough to warrant turning in this form. But the paperwork is necessary to receive a check.
CalEITC is one of the most effective tools to help lift people out of poverty and provide families with a much-needed financial boost. Increasing the income of low wage earners not only raises their quality of life, but also stimulates the local economy when EITC tax refunds are spent.
As Chair of the Assembly Budget Committee, I fought to raise the income limit for CalEITC so families earning up to $24,950 in 2018 are eligible for a refund. Young adults and seniors aged 65 and older with no dependents also now qualify. This builds upon last year’s success when we opened up eligibility to self-employed workers, who continue to qualify for the tax credit this year.
CalEITC can put thousands of dollars into the pockets of folks who need it the most. The latest Public Policy Institute of California study on poverty finds about 15% of the state’s residents lack the resources to meet their basic needs (approximately $24,300 a year for a family of four), but this number jumps to nearly 20% when our state’s cost-of-living is factored in.
Almost four in ten Californians are living in or near poverty, and a Queers for Economic Justice report found children in same-sex households experience poverty rates twice those of children in heterosexual married couple households. Imagine what a few hundred to a few thousand dollars could do for these families.
Together with the federal EITC, the combined cash back from the CalEITC can be life-changing. The money could be used to pay bills or buy new clothes for the kids. It can also be put into a savings account for emergencies, something that families living paycheck to paycheck struggle to do. The tax credit also has proven additional long-term benefits, with research showing children whose families receive an EITC refund perform better in school and have better health outcomes. Now that’s a great investment.
Nonprofits operating Volunteer Income Tax Assistance (VITA) programs can connect people with free tax preparation services. Last year, I worked with community partners across the state to share the news—in the end, 1.4 million Californians claimed the tax credit, tripling the number of people receiving it in 2017 and putting $350 million into their pockets. But we still aim to do better this year.
Are you or someone you know missing out? Lack of awareness is our enemy here. Help us spread the word! The tax deadline this year is April 15. You still have a little bit of time to file. For more information, please visit the CalEITC website ( https://www.caleitc4me.org/ ). You can find out if you qualify, the locations for free tax assistance near you, or how to file a return yourself.
There are no silver bullets in our fight against economic inequality, but EITC programs are one effective way to help reduce it. I was heartened to see that our new governor wants to expand CalEITC even more. The Legislature will work with him and continue to look for additional ways to help lift Californians out of poverty.
Phil Ting represents the 19th Assembly District, which includes the Westside of San Francisco along with the communities of Broadmoor, Colma and Daly City.
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