March 6, 2019 - The state adopted an EITC in 2015 and expanded it in 2017 and 2018. The Governor proposes another expansion starting in 2019 that would (1) extend the income eligibility range to $30,000, (2) increase the credit amount for workers with dependents under age six, and (3) increase the credit amount for workers with earnings at the higher end of the current eligibility range. This report evaluates the Governor’s proposal, discusses potential alternative approaches, and examines implementation issues and options for providing credits on a monthly basis.
December 18, 2014 - In June 2014, the Legislature directed the LAO to prepare a report analyzing the costs, benefits, and trade-offs of various options for a state earned income tax credit (EITC) that would supplement the federal credit. This report discusses considerations for adopting a state EITC and provides three options for the Legislature's consideration.
May 8, 2018 - This post explains a grant program that provided funds for education and outreach related to the state earned income tax credit (EITC) and provides comments on how the Legislature might prioritize any future state-funded EITC outreach activities.
January 26, 2021 - Presented to: Senate Budget and Fiscal Review Subcommittee No. 4 On State Administration and General Government (Hon. Anna M. Caballero, Chair)
April 13, 2021 - The federal American Rescue Plan (ARP) that passed on March 11 expanded a number of federal income tax credits. This piece will briefly describe the changes to three credits that apply to many lower-income and middle-income filers: the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Child and Dependent Care Expenses Credit (“child care credit”). We also discuss changes to the dependent care exclusion which is linked to the child care credit.
February 12, 2019 - Presented to: Assembly Health Committee, Assembly Budget Subcommittee No. 1 on Health and Human Services, Senate Committee on Health, and Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
January 22, 2021 - This handout provides an overview of the Governor's budget proposal to provide a one-time $600 refund to certain low-income workers, evaluates the Governor's proposal, and provides a more targeted alternative for the Legislature to consider.
April 11, 2019 - Presented to Senate Budget and Fiscal Review Committee Subcommittee 4 on State Administration and General Government
March 18, 2013 - Presented to Assembly Revenue and Taxation, and Housing and Community Development Committees
May 14, 2018 - The 2018-19 May Revision proposes to expand the state’s Earned Income Tax Credit. In this post, we describe and comment on the proposal.
January 27, 2011 - The Governor proposes to increase California Community College (CCC) fees from $26 per unit to $36 per unit beginning on July 2011. We believe that a fee increase should be an important component of the state’s budget strategy for CCC, as it would leverage more federal funds (in the form of federal tax credits) to mitigate programmatic impacts on CCC instruction and services, while having no negative effect on financially needy students (who do not pay fees). While the Governor is on the right track, the Legislature might consider going even further in the budget year to tap additional federal dollars in support of the CCC system. In future years, we recommend the Legislature ensure that CCC fee levels are pegged to the maximum amount covered by federal tax credits.
October 3, 2022 - Presented to: Assembly Committee on Revenue and Taxation