California Expands EITC

By Devin Simpson

Today, California Governor Jerry Brown (D) signed a $139 billion state budget that includes expanding eligibility for the state’s Earned Income Tax Credit (EITC) to younger workers and seniors. The legislation also adjusts the state-level EITC’s income limits to reflect California’s recent minimum wage increase to $12 per hour and ensure those working full time in minimum wage jobs can receive the credit.

The federal and state EITC help millions of working Californians make ends meet each year. However, like the federal EITC, the state’s credit was previously only available to workers between the ages of 25 and 65, unless they had dependent children. Under the new legislation, eligible workers between the ages of 18 and 25 can claim the credit, regardless of dependent children. According to the California Budget & Policy Center, this group includes many former foster youth, first-generation college students from low-income families, and young adults entering the workforce who are likely to be employed in low-wage, entry-level jobs.

The new legislation also expands eligibility for the state-level EITC to workers above the age of 65, many of whom are still working because they do not have enough savings to retire. The original legislation would have also expanded the state’s EITC to workers filing with Individual Taxpayer Identification Numbers (ITINs), but that provision was rejected during budget negotiations.

For more information on California’s EITC and other state-level EITCs across the country, visit our 50-state map here.