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Legislation Focuses On Young Child Tax Credit
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California State Assembly Member Miguel Santiago (D-Los Angeles) on Feb. 27 unveiled AB 1128, sponsored by the California Earned Income Tax Credit (CalEITC) Coalition, to expand the poverty-fighting and equity-building Young Child Tax Credit (YCTC) to all CalEITC-eligible households with dependents. AB 1128 would provide 700,000 additional working families with up to $1,083 each year.

Many CalEITC-eligible families with older children no longer qualify for the Young Child Tax Credit. Santiago said this is particularly concerning given the recent failure of Congress to reauthorize the much-needed enhancements to the federal Child Tax Credit and federal Earned Income Tax Credit, which dramatically lowered the child poverty rate during the COVID-19 pandemic. As this and other pandemic-era relief ends, California must step up support for families with children who are struggling to make ends meet and to prevent a significant number of families from falling back into poverty, advocates said.

“Day after day, families are forced to make gut-wrenching tradeoffs, whether to put food on the table or gas in the car,” said Assembly Member Santiago. “AB 1128 offers hope for Californians who are struggling to make ends meet by providing much-needed financial relief that puts money back in their pockets to reduce the risk of children falling back into poverty while promoting greater economic stability. California must take action before families are forced into more and harder, impossible tradeoffs.”

“We fully support President Biden’s call for Congress to restore the expanded Child Tax Credit that slashed child poverty to historically low rates during the COVID-19 pandemic,” said Pete Manzo President and CEO of United Way of California. “At the same time, California must do more to support families grappling with the high cost of living using the proven tool of state tax credits like the YCTC.”

Rising inflation has resulted in higher costs of necessities like food, gas, and housing for families, often stretching household budgets to the breaking point. Sustained inflation harms Californians with the lowest incomes the most. As Californians with low-incomes continue to bear the greatest burden from these economic conditions, Santiago said it is imperative for the state to double down on CalEITC and YCTC protections and strengthen the social safety net.

AB 1128 would expand the YCTC to three types of families with low-incomes: Those with children ages 6-18; children ages 19-23 who are students; children of any age with permanent and total disabilities.

In addition to expanding the YCTC, the CalEITC Coalition is calling on Governor Newsom and legislative leaders to support families who are struggling by raising the minimum CalEITC credit to $300 provided by AB 1498 (Gipson), and ensuring investments in tax credit outreach and free tax preparation/Volunteer Income Tax Assistance (VITA) are maintained in the state budget.

The California Earned Income Tax Credit (CalEITC) Coalition is a broad group of 35+ advocacy and community and faith-based organizations, including policy advocates, low-income service providers, and labor organizations across the state of California committed to expanding access to the CalEITC and other cash-back tax credits.