Information provided by the Office of State Senator Anna Caballero .

Gov. Gavin Newsom has signed SB 1409, which requires the Franchise Tax Board to issue a plan to increase the claims of the California and federal Earned Income Tax Credit (EITC), including alternative filing systems to help low-income families that currently miss out on the credit.

A recent press release explained that the CalEITC is a refundable tax credit that provides money back to working low-income families at tax time. Eligible families failed to claim millions of dollars because they were unaware the credit exists or because they do not file a tax return, the release stated. For the 2019 tax year, the Franchise Tax Board estimated 1.25 million eligible taxpayers would not claim the money they are entitled to receive.

“The CalEITC is one of the most effective tools to combat poverty in the state,” said State Senator Anna Caballero, who introduced the bill. “Due to the COVID-19 pandemic, our most vulnerable families are in desperate need of financial assistance and will likely continue to be for some time. SB 1409 will help inform California’s path forward to make sure the EITC reaches more eligible families in the years to come.”