Sacramento – Senator Andy Vidak (R-Hanford) today announced he is authoring Senate Bill 152, a measure that would provide a tax credit for working low-income and middle-class families.
“Struggling families that are working hard to earn a paycheck should be able to keep more of the money they earn,” said Vidak, who represents the poorest Senate district in the state. “When folks in disadvantaged communities have more money to spend, those extra dollars help support local jobs and small businesses.”
SB 152 would create a refundable California Earned Income Tax Credit (CEITC) that would be equal to 15 percent of the federal EITC. The federal EITC is a refundable tax credit for low-income and middle-class working households that research shows is an effective tool for lifting families out of poverty, while rewarding work.
To be eligible for the CEITC, individuals must meet the federal EITC requirements for the current tax year, as well as have either a Social Security Number, legal work authorization or a taxpayer identification number. The legislation would also create a framework for the Franchise Tax Board (FTB) to use to ensure that eligible families are receiving the CEITC. The CEITC ends in 2023.
In tax year 2013, 28 million American tax returns received the federal EITC. In California, over 3.1 million Californian tax returns received the federal EITC. These 3.1 million returns resulted in $7.3 billion in refundable tax credits for working California families with the average tax credit being $2,373.
The Legislative Analyst Office (LAO) estimates that the federal EITC helps to keep 750,000 Californians out of poverty every year.
For a copy of SB 152, click here.