Cal EITC claims exceed 2 million, resulting in a historic amount of $381 million being refunded to individuals with low income.

In just 4 years, the number of households benefiting from this financial assistance has grown fivefold.

SACRAMENTO, CAAccording to recently released data from the Franchise Tax Board, over 2 million employees have reported a total of $381 million in claims for the California Earned Income Tax Credit (Cal EITC) within the initial eight months of 2019. This represents a substantial 40% rise in the number of claims compared to the corresponding period in the previous year.

Joe Sanberg, the founder of Golden State Opportunity, expressed his pride in the significant progress made by California in the effort to improve productivity. Sanberg mentioned that he was honored to join a wide-ranging alliance of advocates in advocating for the establishment of the Cal EITC in 2015. He further highlighted that the number of low-income households benefitting from the Cal EITC has skyrocketed by over five times since then. Despite this positive development, Sanberg acknowledged that the mission to eradicate poverty and establish financial stability for all citizens of California is still far from being fully realized, emphasizing the need for ongoing efforts.

According to recent census data, despite California being the 5th largest economy globally, over 7 million individuals within the state experience poverty when considering the cost of living. This places California among the nations with the highest poverty rates. Furthermore, in the year 2018, incomes for the majority of individuals, excluding the highest earners, did not experience any significant growth.

Although these statistics serve as a somber reflection of the increasing disparity in California, the ongoing achievement of the Cal EITC presents an encouraging solution. Governor Gavin Newsom and the Legislature have further reinforced this triumph by augmenting the Cal EITC into a program with a budget of $1 billion for the year 2020. This substantial expansion entails that economically disadvantaged parents with young offspring will now qualify for an extra credit of $1,000, while individuals earning $30,000 or less will have the opportunity to avail themselves of the Cal EITC in the upcoming year.

The EITC has been established as an effective method for alleviating poverty and enhancing the well-being of individuals earning low wages. Presented below is an assortment of research that demonstrates the favorable outcomes resulting from augmenting EITC refunds:

• Addresses generational poverty: The provision of an Earned Income Tax Credit (EITC) to parents significantly improves the health and academic performance of their children. Moreover, these children are more inclined to pursue higher education, leading to better career prospects and increased earnings in adulthood. https://calbudgetcenter.org/wp-content/uploads/Report-State-EITCs-Build-on-Success-of-Federal-EITC-03.09.2017.pdf

• Assisting working parents, particularly single mothers, in advancing their careers: Women who are granted a more substantial Earned Income Tax Credit (EITC) in their twenties and thirties ultimately experience greater financial gains in their forties compared to those who received a smaller credit or none at all. https://news.uci.edu/2018/01/09/earned-income-tax-credit-increases-womens-earnings-over-time-study-finds/

• Assisting workers in managing the exorbitant expense of housing: An increased refund from EITC provides working parents the opportunity to transition from shared dwelling arrangements with other adults and secure a domicile under their name on either the lease agreement or mortgage. http://fordschool.umich.edu/news/2019/pilkauskas-finds-earned-income-tax-credit-helps-low-income-moms-live-their-own

• Reduces Suicide: Financial Security's Impact Studies have demonstrated that when individuals experience a sense of economic stability, the likelihood of them resorting to suicide decreases significantly. Specifically, research has indicated that a mere 10% augmentation in the Earned Income Tax Credit (EITC) results in a remarkable 5.5% decline in suicide rates among individuals with limited educational backgrounds. https://www.nber.org/papers/w25787