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January 26 – February 2 was CalEITC Awareness Week, developed to spread awareness about the California Earned Income Tax Credit (#CalEITC) and how it can help uplift eligible Californians across the state. Governor Newsom even issued a proclamation acknowledging the week and its importance. 

Over the course of the week, we gathered special guests to answer questions and discuss the ins and outs of tax credits like the CalEITC. Check out the recordings:

• Every Californian Empowered: Free Tax Prep for All (English and Spanish)
• Launch Event: Tax Season is Here!
• Taxes 101 (English and Spanish)
• Save Money Through MyFreeTaxes.org
• Winning the Implementation: ITIN Access to Tax Credits

As co-leads of the CalEITC Coalition, we were also thrilled to participate in a press conference where California State Treasurer Fiona Ma and Assemblymember Stephanie Nguyen signed the coalition’s Pledge for Prosperity, vowing to protect and strengthen powerful anti-poverty tools such as the CalEITC, Young Child Tax Credit, free tax prep, and tax education and outreach programs.

Here is a little more background about tax credits and the CalEITC:

What Is a Tax Credit?

Tax credits are refunds designed to support households in need of a financial boost. They are based on a variety of factors, like income and whether you have children. Tax credits help reduce the amount of taxes you owe when you file each year. Even if you aren’t required to file taxes because of your income, filing can help you unlock these credits and put money in your pocket.

“It’s your money – get it!” Andrew LePage from the Franchise Tax Board said during our CalEITC webinar. The sentiment was echoed by community member Alexis Obinna: “Make sure you’re claiming your tax credits. These are things that belong to you!”

What Is the CalEITC?

The Earned Income Tax Credit (EITC) is a federal tax credit for people whose income falls below a certain amount. The California Earned Income Tax Credit (CalEITC) is the California state version of the EITC. Households may be eligible for both the federal EITC and the state CalEITC. 

United Ways of California collaborated with organizations across the state in advocating to make the CalEITC a reality. The credit was established in 2015 and has since expanded to make more Californians eligible. 

Why Is the CalEITC Important?

Tax credits are the most targeted and effective tools we have to support families who are struggling to afford basic necessities. Tax credits help reduce poverty, empower families, and strengthen communities. 

Our Real Cost Measure study found that about one-third of Californians struggle to make ends meet. Furthermore, 97% of those households had at least one working adult. The CalEITC and Young Child Tax Credit – another important state tax credit – put more than $1.3 billion in hard-earned cash back in the pockets of more than two million California households last year. 

In 2020, thanks in large part to continued advocacy by United Ways of California and partners, people who file their taxes using an ITIN (Individual Tax Identification Number) became eligible for the CalEITC. This is important because it ensures that Californians can benefit from tax credits regardless of their immigration status. It is also critical because ITIN filers are not eligible for federal tax credits.

During our Instagram Live about the work of the CalEITC Coalition to expand eligibility to ITIN filers, Sasha Feldstein of California Immigrant Policy Center shared that, before this expansion, “hundreds of thousands of immigrant Californians were excluded [from getting the CalEITC] just because of the number they used to file their taxes: … an ITIN instead of a Social Security Number. This meant that immigrant parents who worked and earned the same amount as a US-born parent would come away after tax season with vastly different incomes.”

United Ways of California is proud to support initiatives that promote the financial well-being of all Californians, such as tax credits, free tax help, tax education and outreach, and more.

Learn more about tax credits as well as how to file your taxes for free at MyFreeTaxes.org.