On CalEITC’s 10th Anniversary, Advocates & Legislators Celebrate Billions in Cash Returned to Struggling Californians…
FOR IMMEDIATE RELEASE February 4, 2025
… Call for Expanding Proven Tools to Address Poverty Crisis for Children & Families
Sacramento, CA — Prosper California, a coalition of policy experts and community organizations, was joined by California legislators and advocates today to celebrate ten years of the California Earned Income Tax Credit (CalEITC) in helping Californians make ends meet and pay for the soaring costs of everyday basics. The powerful anti-poverty tool has returned more than $7 billion in cash to California families and people with low incomes over the last decade.
“We are thrilled to celebrate a decade of California choosing to invest in families through the CalEITC and Young Child Tax Credit. These refundable tax credits are remarkable poverty fighting tools, but the work is not over,” said Sam Wilkinson, Senior Policy Associate, GRACE - End Child Poverty CA. “Too many Californians are still living in poverty - we know that resourcing families with direct cash assistance, as Assemblymembers Ahrens and González propose, works to reduce poverty and deliver equity.”
Annual impacts of the CalEITC, Young Child Tax Credit (YCTC), and Foster Youth Tax Credit (FYTC) include:
3.5 MILLION people and families who receive cash through their tax refunds, helping to put food on the table, pay rent, and save for the future
$1.4 BILLION in cash payments through tax credits is directed to millions of California families and individuals
$2.8 BILLION is invested in local economies throughout the state, supporting local jobs and businesses
With 3 in 4 eligible Californians being people of color, including about half who are Latine, the CalEITC is also a vital equity-building tool for our state.
Noting the powerful impact of refundable tax credits to help families meet a cost of living that is increasingly out of reach, advocates called on California leaders to expand on the proven power of these tools.
“California’s poverty crisis is deepened by its affordability crisis. These state lawmakers understand what’s at stake for millions of Californians living paycheck to paycheck, struggling to afford the high costs of living. By continuing to build on the past decade of the CalEITC’s success, state lawmakers can build a more equitable and prosperous California for all,” said Amy Everitt, President of Golden State Opportunity.
With poverty rates and affordability challenges increasing and millions of Californians having to choose between paying the rent and putting food on the table, Prosper California and Assemblymembers Patrick Ahrens and Mark González announced new legislative efforts to continue building and strengthening anti-poverty tax credits. Assemblymember Ahrens is authoring a proposal to increase the CalEITC minimum from $1 to $300, providing eligible tax filers with a more meaningful credit to help reduce poverty and families afford soaring costs for basic necessities. To ensure families with children aged 6 and older have the financial support they need to raise healthy families, Assemblymember González introduced AB 397 to expand the YCTC to all CalEITC-eligible households.
“Californians – especially the millions eligible for the California Earned Income Tax Credit (CalEITC) – are struggling to make ends meet, and I am fully committed to putting more money in Californians’ pockets to reduce their struggle and improve their lives,” said Assemblymember Patrick Ahrens. “My new proposed legislation will help the working poor by increasing the minimum refundable CalEITC tax credit to $300, putting money back in the pockets of Californians to help them cover the rising cost of housing, food, utilities and more.”
In addition to these legislative efforts, advocates called on state lawmakers to restore $20 million in funding for Free Tax Preparation Assistance, Outreach and Education, and Individual Taxpayer Identification Number (ITIN) Application assistance available through the Volunteer Income Tax Assistance (VITA) programs run by local community-based organizations. As part of the FY 24-25 state budget agreement, FTPA was reduced by 40% (or $8 million), decimating vital support needed to reach tens of thousands of Californians who rely on local community-based organizations for free tax filing, ITIN applications and renewals, and claiming tax credits.
“Refundable tax credits like the CalEITC and federal EITC and Child Tax Credit can provide thousands of dollars to California working families earning at or modestly above the minimum wage. Connecting families and individuals to those credits is the key reason United Ways and partners provide free tax preparation through the Volunteer Income Tax Assistance (VITA) program,” said Pete Manzo, President & CEO, United Ways of California. “Beyond that, free tax preparation through VITA — in person and online — plays a crucial role in helping households avoid predatory financial services and allows them to redirect all of their tax refunds toward groceries, gas, childcare, and other basic necessities. California United Ways, along with our dedicated on-the-ground partners, help communities across the state know about and access the impactful tax credits they qualify for.
After the news conference, news reporters were invited to tour a VITA bus outside the state capitol. The mobile, free tax preparation service is an example of outreach Prosper California partners lead to ensure Californians know about the opportunity to claim refundable tax credits by filing their state tax return.
The event took place during CalEITC Awareness Week. Declaring the annual week dedicated to encouraging Californians to claim the tax credits for which they are eligible, Governor Newsom said: “The Earned Income Tax Credit (EITC) is one of the most effective tools we have to lift working families and their children out of poverty. Beyond providing a critical immediate boost in family income to help meet basic needs, research shows that the EITC improves child and maternal health and the educational outcomes of children in the families who receive it and spurs local economic growth.”
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Prosper California’s mission is to take bold steps toward closing the racial income and wealth gap by building an equitable California where everyone has the cash and resources to thrive. Prosper California advocates for increased cash payments and other policies to boost incomes, improve well-being, and create real opportunities for all Californians.
Prosper California (formerly the CalEITC coalition) is co-led by United Ways of California, Golden State Opportunity, and Grace/End Child Poverty in California. The California Budget and Policy Center is Prosper California’s research partner.
