California Joins the Majority of States to Offer an EITC

By Lauren Pescatore

Yesterday, California Gov. Jerry Brown (D) signed into law a budget that includes the creation of a refundable state-level Earned Income Tax Credit (EITC). The state becomes the 26th in the nation to offer additional support for workers and their families by complementing the federal EITC with a state version.

California’s new credit is impressively large. Parents earning just under $7,000 each year will qualify for the maximum state EITC of $2,358. Combined with the federal credit, the new state EITC could boost this parent’s income by nearly three-quarters, according to the California Budget & Policy Center (CBPC).

As the nation’s most populous state, California will make a notable difference in the fight against poverty with the help of its new EITC. CBPC reports the credit could reduce economic hardship for nearly 2 million Californians.

The Golden State has taken a huge step to reward work and prevent poverty by enacting its own EITC. If your state is considering enacting an EITC of its own, check out our “Top 6 Reasons to Enact a State EITC” for messaging ideas and research.