Report

The CalEITC and Young Child Tax Credit

Smart Investments to Broaden Economic Security for Californians

The California Budget & Policy Center’s guide, The CalEITC and Young Child Tax Credit: Smart Investments to Broaden Economic Security for Californians, provides an overview of how refundable state income tax credits help people who earn little from their jobs to pay for basic necessities and support families, children, and communities.

Under the 2019-20 state budget, Governor Newsom and the Legislature expanded the California Earned Income Tax Credit (CalEITC) and created the Young Child Tax Credit. The expansion of the CalEITC — originally created in 2015 — included increasing the income limit and increasing the size of the credit for tax filers with low incomes.

The guide looks at two tax credits:

  • CalEITC — available to families and individuals with annual earnings under $30,000; and
  • Young Child Tax Credit — available to CalEITC-eligible families with children under age 6.

In this extensive guide that includes more than 25 comprehensive charts by Senior Policy Analyst Alissa Anderson, readers will learn:

  • How California is an economic powerhouse, but millions are not benefiting from the state’s economic success
  • How boosting the incomes of workers who earn little from their jobs benefits families, children, and communities
  • Who benefits from the CalEITC and Young Child Tax Credit
  • How California has significantly strengthened the CalEITC since 2015
  • How does the CalEITC compare to the federal EITC and other state EITCs
  • How does California’s Young Child Tax Credit compare to the federal Child Tax Credit and other state child tax credits
  • How building on the CalEITC and Young Child Tax Credit would allow more Californians to share in the state’s prosperity
  • Why the CalEITC and Young Child Tax Credit are smart investments

View the chartbook.