May 29, 2024


El Chicano, Colton Courier, Rialto Record

Expansion of CalEITC will lift IE families out of poverty.

3 min read

Photo/New American Media: Inland Empire Regional Field Organizer for the Golden State Opportunity Foundation, Samuel Sukaton, awards a gift basket to the winner of a raffle held during the Tacos & Taxes filing drive held at San Bernadino Valley College on Saturday, February 1

The Inland Empire is one of the fastest growing regions in the country and will likely remain so for years to come.

UC Riverside’s School of Business Administration Center for Economic Forecasting and Development predicts the growing economy and rising coastal home prices will continue to cause residents to move to more affordable areas like the Inland region. Already the state’s fifth largest metropolitan area by economic output, having added 240,000 jobs in the last five years, the Inland region gained over 48,000 residents in 2015, according to The Press-Enterprise, as Riverside County’s population grew 1.3 percent.

This influx of residents is even more reason to take advantage of resources to help those in need and make sure everyone can share in economic security. One of those resources is the nascent California Earned Income Tax Credit (EITC), one of the most effective tools for lifting children and their parents out of poverty and into financial security.

The CalEITC is mirrored after the federal EITC, which has decades of success benefiting children, people of color and low- and middle-income working families and communities. Receiving EITC refunds keeps people at work, reduces hardships, improves families’ health and increase academic achievement and future earnings of their children all the while pumping money back into the local economy.

In 2015, CalEITC’s first year, the program benefited 815,000 Californians, half of whom were children. Families with children received over 90 percent of the $200 million in refunds. The Inland Empire has been especially impacted by the policy. San Bernardino and Riverside County residents have collected the second- and fourth-most money of any county in CalEITC’s first two years. As of May 20, 24,230 claims in San Bernardino County have led to over $14 million, while 21,323 claims in Riverside County have totaled over $12 million, both increases from last year’s numbers. That’s money that goes to groceries, rent, medicine and bills.

Right now, the State Legislature is considering expanding the CalEITC. We strongly urge the Senate and Assembly Leadership to do so to help even more low-income Californians. After all, the CalEITC is actually relatively limited as is.

Parents of one child do not qualify if they earn more than $10,000, half a full-time, minimum-wage salary. Parents of two children can’t earn more than $14,000. The full-time minimum-wage job of a single mom exceeds the current qualifying income limit. Raising the CalEITC’s income threshold to the federal EITC’s limit would allow some 2.7 million households to reap the rewards of the tax credit.

Equally stupefying is that, between the federal EITC and dozens of state EITCs, the CalEITC is the only one that excludes self-reported income. This is especially problematic given that it is our state’s fastest-growing kind of income and earned disproportionately by women and people of color. Allowing small entrepreneurs, independent contractors and other self-employed workers to qualify for the CalEITC is the just thing to do; it would also impact another 134,000 low-income households across the state.

Workers eligible for the tax credits need to actually claim them though. In 2012, for instance, nearly 146,000 eligible workers did not claim the EITC. That resulted in almost $144 million in unclaimed EITC money left on the table in San Bernardino County and $135.5 million in Riverside County, according to the IRS. Some people don’t know about the credits, others simply don’t want to file taxes, whether because they are not required or can’t afford the cost.

It is imperative the State Legislature also invest money in CalEITC outreach and promotion and increase the number of free tax preparation services so all hard-working Californians and their families benefit from the $2 billion of unclaimed EITC money that California leaves on the table each year.

Three out of four Californians are $700 — a broken bone, a blown tire, a leaky pipe — away from financial crisis. The EITC is a real solution with a history of success for millions of people.

We call on our leaders in the Senate and Assembly to expand and strengthen the CalEITC so millions more California workers and children, especially here in the Inland Empire, can realize its benefits for achieving economy security.

Armand D. Domalewski is with the California Earned Income Tax Credit organization



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