California is an expensive state to live in. However, qualifying Californians can access state-level refundable tax credits to enjoy economic support and lighten the burden on low-income working individuals and families.
Learn about the California Earned Income Tax Credit (CalEITC) state support program. This article explains how to access CalEITC regardless of race or immigrant status. Let’s dive in!
What Is California Earned Income Tax Credit (CalEITC)?
California Earned Income Tax Credit is a common refundable tax relief service for the state’s residents. The economic support program offers a refundable tax credit to help low-income workers and households pay for basic needs such as housing, clothing, food, and other necessities.
How Does California EITC Work?
CalEITC is an earned income tax credit for residents in need of tax debt relief. The program is controlled by the California Franchise Tax Board, and it either reduces your owed tax or offers a refund after filing state tax returns.
An eligible person with more qualifying children will receive more than someone without kids who qualifies for EITC in California. For instance, families with no qualifying child can get a minimum tax credit of up to $275, while families with one child can get up to $1,900.
If you are an immigrant living in California and struggling to make ends meet, know that you could claim CAPI. Learn more about it here.
Who Is Eligible for the CalEITC?
CalEITC is for low-income to middle-income families and individuals who reside in California. To qualify for the program, you must:
- Be at least 18 years old or be a caregiver to a qualifying child.
- Earn a minimum income of $1 and at most $30,950.
- Possess a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for your household, including yourself, your spouse, and qualifying children.
- Have lived in California for more than half of the filing year.
- Have a qualifying child under 19 years old at the end of the tax year.
Do Self-Employed Individuals Qualify?
California business owners can also apply for CalEITC and enjoy its tax credit benefits. However, to be eligible, you must:
- Be self-employed and have earned less than $30,950 in the tax year.
- Not have received a Form W-2.
- Have a business in occupations such as ride-sharing, domestic work, home care, childcare, gardening, janitor, and on-call work.
The CalEITC income requirements and credit amounts are susceptible to annual changes. Visit the CalEITC website for updated information about the program requirements. You can also use the California Earned Income Tax Credit Calculator to estimate your credit and determine your eligibility before applying.
How To Claim CalEITC
You can claim the CalEITC tax refund by filling out and submitting Form FTB 3514 below alongside other documents (Form 540, Form 540 2EZ, or Form 540NR) when filing your state tax return:
The CalEITC program is also open to people without an SSN, but you must provide your ITIN and those of your qualifying children and spouse. However, do due diligence and make sure you qualify for the credit before applying. Failure to do so may result in a penalty of up to $2,400 per claim, and the state may disqualify you from claiming CalEITC for up to 10 years.
Would you like to bond with our newborn? Or do you need to look after your sick child? Discover how Paid Family Leave (PFL) in California may come to your aid.
Differences Between CalEITC and The Federal EITC
The Federal Earned Income Tax Credit (EITC) works like the CA EITC. It’s a refundable tax credit for low- to medium-income earners or IRS Fresh Start beneficiaries that puts some money back in their pockets every tax year. However, it is organized by the US government through the Internal Revenue Service (IRS).
If you qualify for the CalEITC or the Federal EITC, you may be eligible for other credits, like the California Young Child Tax Credit (YCTC). This credit has similar income conditions but offers up to $1,117 for SSN and ITIN holders with a qualifying child younger than 6 years.
However, unlike the CalEITC and Federal EITC, having multiple children does not increase the credit amount for YCTC claimants.
| Number of Children | Maximum Income | CalEITC Maximum Credit | Federal EITC Maximum Credit | YCTC Maximum Credit |
| 0 | Up to $30,950 | Up to $285 | Up to $600 | $0 |
| 1 | Up to $30,950 | Up to $1,900 | Up to $3,995 | $1,117 |
| 2 | Up to $30,950 | Up to $3,137 | Up to $6,604 | $1,117 |
| 3+ | Up to $30,950 | Up to $3,529 | Up to $7,430 | $1,117 |
Get More Money for Your Family
State-designed and funded tax credits like CalEITC complement the Federal EITC to provide additional financial support to low-income working individuals and families. To qualify, you must earn no more than $30,950 annually. If you do, you can get CalEITC of up to $3,529.
Applying for the refundable credit requires filing your tax return accurately, but you don’t need to pay to file your taxes. You’ll find Volunteer Income Tax Assistance (VITA) Program representatives who can easily file your taxes and apply for CalEITC at no cost.
FAQs
When can you apply for CalEITC?
You can file your taxes and apply for CalEITC at any time of the year. You can also submit a claim for the past years for which you may have qualified.
How many kids can you claim in California?
The CalEITC applies to a maximum of three children. The credit amount increases with the first three qualifying children, but there are no changes after this number of children.
What is the income limit for CalEITC?
As of the 2023 tax year, California’s maximum income for CalEITC is $30,950. If you earn more, you may not qualify for the benefit.
