The purpose of the CalEITC is to reduce poverty among working Californians, but most people get less than $200 from the credit – far too little to achieve this goal. The credit for workers without dependents – who comprise 74% of CalEITC beneficiaries – ranges from just $1 to $255 per year. Plus, the majority of these workers likely don’t qualify for the federal EITC.
This helps explain why 35% of CalEITC-eligible working-age adults without dependents live in poverty – based on the California Poverty Measure – even after accounting for the tax credits and public benefits they get.
Establishing a much larger minimum CalEITC for all eligible workers would help Californians
who are paid low wages better meet basic needs. It would also help make the tax code more
equitable by strengthening a credit that largely benefits Californians of color.
