SCR 14: CalEITC Awareness Week.

WHEREAS, The California Earned Income Tax Credit (CalEITC), a refundable tax credit, was enacted in 2015 and, along with the federal Earned Income Tax Credit (EITC), is one of the most effective tools we have in California to fight poverty; and

WHEREAS, The CalEITC provides credits based on household size and income, but eligible filers can receive a maximum credit of $3,529 and for the 2022 tax year, nearly 3,500,000 California tax filers claimed the CalEITC benefit; and

WHEREAS, According to the California Budget and Policy Centre, California’s poverty rates increased significantly in 2023, with disproportionate impacts on Latinx and Black residents and multiracial Californians. California’s overall poverty rate increased to 18.9 percent, up from 16.4 percent in 2022 and 11 percent in 2021, while the poverty rates for Latinx and Black Californians jumped to 25 percent and 22.3 percent respectively, representing nearly a 4-percent increase from 2022 to 2023. Additionally, the poverty rates for American Indian, Alaksa Native, Native Hawaiian, Pacific Islander, and multiracial residents surged from 8.4 percent in 2022 to 13.6 percent in 2023; and

WHEREAS, According to United Ways of California’s Real Cost Measure report, over one in three Californians struggle to meet basic needs, and of the estimated 3,700,000 households in California that fall below the Real Cost Measure income, 97 percent have at least one working adult. The CalEITC is projected to help families improve their financial stability now and into the future; and

WHEREAS, Individual Taxpayer Identification Number (ITIN) holders are ineligible for the majority of federal tax benefits, but California has made the groundbreaking decision to open benefits like the CalEITC and Young Child Tax Credit to ITIN holders. This is especially important as 57 percent of households led by someone without United States citizenship live below the Real Cost Measure; and

WHEREAS, Fifty-four percent of households in California with children under six years of age fall below the Real Cost Measure and the Young Child Tax Credit is available to all CalEITC-eligible families with children under six years of age; and

WHEREAS, According to state and national reports, many eligible households in California do not claim their state and federal Earned Income Tax Credits, leaving billions of dollars unclaimed each year. Research suggests that the credit creates local economic impacts equivalent to at least twice the amount of EITC dollars received. Increasing the uptake of tax credits would support households to cover basic expenses such as rent, groceries, and utilities; and

WHEREAS, California can support CalEITC-eligible taxpayers to claim their full tax credits by supporting Volunteer Income Tax Assistance sites that provide high-quality tax preparation, financial stability services, and connections to other community services at no cost. These free services are linguistically and culturally responsive and ensure that tax filers can claim their full tax credit amount without paying unnecessary fees to commercial tax preparers, which can often cost hundreds of dollars; and

WHEREAS, The CalEITC, in combination with the federal EITC program and the Young Child Tax Credit, is a proven tool to help reduced poverty and research shows that the EITC can improve child and maternal health and spur local economic growth. Children in families that receive the EITC have healthier lives in both the short and the long term; and

WHEREAS, California has made a commitment to support low-income families through these programs, which now returns over $1,300,000,000 into households each year, and must continue to take measures to increase the number of households that claim the benefits they are entitled to; now, therefore, be it

Resolved by the Senate of the State of California, the Assembly thereof concurring, That the Legislature proclaims January 31, 2025, through February 7, 2025, as CalEITC Awareness Week; and be it further

Resolved, That the Secretary of the Senate transmit copies of this resolution to the author for appropriate distribution.