The Earned Income Tax Credit, EITC, is a benefit for working people with low to moderate income. There are Federal EITC (EITC) and California EITC (Cal EITC). They are both refundable tax credits for people who qualify. Those who qualify for EITC and/or CalEITC can pay less tax or even get a tax refund based on the earned income in tax year, filing status and family size.
Do I Qualify for EITC?
To qualify for EITC, you must have earned income at least $1 from working for someone or from running or owning a business or farm in the tax year and meet basic requirements. Married taxpayers must file jointly to qualify for this benefit. People without qualifying children or dependents may also qualify for EITC.
For more in-depth information about EITC eligibility requirements, please visit the IRS site(www.rebrand.ly/irseitcq ). Most people who qualify for the Federal EITC, also qualify for California EITC (Cal EITC).
How can I claim EITC?
You must file a Federal tax return in order to claim EITC. Even if you do not owe any tax or are not required to file taxes, you must file your tax return and claim EITC in order to ask for EITC tax refund. Learn more about how to claim EITC, please visit the IRS website (www.rebrand.ly/irseitcclaim).
GET CREDIT GOING BACK 3 YEARS
You can still file your tax returns for 2016, 2017 and 2018 to claim EITC if you were eligible. But you must file to claim it! Find out more here (www.rebrand.ly/irseitcprior )
California Earned Income Tax Credit (Cal EITC)
If you have low income and work, you may qualify for CalEITC. This credit gives you a refund or reduces your tax owed based on your earned income in tax year and number of qualifying child or dependent.
CalEITC has increased the income limits to $30,000 for families, young adults 18-24 and working adults over 65 are now eligible, and self-employed individuals are also eligible for the credit. More Californians will be able to claim this credit than ever before.
What is Young Child Tax Credit (YCTC)?
The Young Child Tax Credit (YCTC) was introduced in tax year 2019. If you qualify for CalEITC and have a child under the age of 6 as of the end of the tax year, you may qualify for up to $1,000 through this credit. Together, these state credits can put hundreds or even thousands of dollars in your pocket.
*Filing your state tax return is required to claim both Cal EITC and YCTC credits.
For more information about CalEITC and YCTC, please visit CalFTB website (https://rebrand.ly/ftbyctc20 ) for more details.
Facts about the Cal EITC
In 2020, Governor Gavin Newsom has expanded CalEITC to further assist families facing poverty. California has more than doubled the investment in CalEITC to $1 billion, which is estimated to increase the number of participating households from 2 million to 3 million. This upcoming year alone CA FTB anticipates $1 Billion in claims between CalEITC and the new Young Child Tax Credit.
A family of 3 could see their income double with Cal EITC and new Young Child Tax Credit, together with federal credits, more than $8,000 back on their taxes!
Research suggests the EITC and Cal EITC credits leads to long-term positive outcomes in health, financial stability, and education for working families. EITC and Cal EITC certainly help improve our local economy.
If you qualify for EITC/Cal EITC, don’t miss out the chance of getting this important tax credits!
Free Tax Preparation Service
PACE VITA is offering free drop-off tax filing service to assist our community with preparing tax returns and prevent face to face tax filing process during the pandemic.
Appointment only. For more details and scheduling an appointment, please visit PACE VITA (https://rebrand.ly/pacevitaw20) website.
*Sign up at www.rebrand.ly/signeitce2020 for more info about EITC/Cal EITC and other Free services that we provide to our community.
PACE EITC/Cal EITC Website: www.rebrand.ly/paceeitc2020
*Email wtsang@pacela.org for a Free Consultation!
