Senator Rosilicie Ochoa Bogh (R-Yucaipa) announced today that the Senate Governance and Finance Committee unanimously approved her Senate Bill 276. SB 276 supports low-to-moderate income working families who qualify for the California Earned Income Tax Credit (CalEITC) by authorizing taxpayers to choose between their 2019, 2020, and 2021 incomes when filing for the credit.
“I am grateful the Senate Governance and Finance Committee supported my efforts to help struggling Californians by approving SB 276,” said Senator Ochoa Bogh. “The COVID-19 pandemic, and resulting shutdowns, disproportionately impacted our lowest income earners in the state. Many of these same individuals, who would be eligible for CalEITC in a normal year and rely on the refund they receive from the tax credit, will be left with a much smaller refund or none at all due to lost wages. I thank the committee for their bipartisan support of SB 276 that will help families across the state by ensuring they continue to receive the assistance provided by the tax credit.”
The California Earned Income Tax Credit reduces the tax burden of low-to-moderate income earners by providing a refundable tax credit to eligible individuals. According to the Public Policy Institute of California (PPIC), of the largest social safety net programs, the combined federal and state Earned Income Tax Credit programs lower poverty rates the most.
Typically, families who receive this tax credit often spend the refund on essential needs. According to the Center for Social Development, 78% of recipients devote a portion of their refund on housing and food. In comparison, 66% of individuals spend a part of their fund on school supplies, clothing, shoes, utility bills, and paying down debts.
By authorizing taxpayers to choose either their 2019, 2020, or 2021 incomes, filers will be able to select the income year that will provide them with the highest tax credit and, therefore, the greatest tax refund. This allows individuals most affected economically by the COVID-19 pandemic to continue to receive the assistance provided by the tax credit without being further disadvantaged by the effects of a closed state and economy.