California Democrats introduce two bills to expand tax credits for those earning low-incomes

Californians who earn low incomes can apply for tax credits on top of what is available from the federal government. That includes credits for families with young children and people who have experience in the foster system. 

One place where they can do that is the Community College Foundation's VITA bus, which tours the state this time of year to help people file taxes. 

The bus — which was parked near the state Capitol on Tuesday — has computers along either side and a lounge in the back, where volunteers often serve snacks. 

“It looks very fancy. I would love to do my taxes here,” said Cody Van Felden when she entered the bus. She works with the nonprofit John Burton’s Advocates for Youth and helps Californians with low incomes file taxes. 

Van Felden said many don’t know what credits they qualify for and some are even too intimidated to do their taxes at all. 

“They leave all this money on the table because the fear kinda amps up more than the benefit of getting the cash back for them,” she said. 

Sometimes the credits are so small, it doesn’t feel worth their while. The California Earned Income Tax Credit — which is available to people earning less than about $32,000 a year — ranges from $1 to about $3,600. Over three quarters of recipients receive less than $300. 

Two new bills aim to change that. Assembly Bill 398 from first-term Silicon Valley Democratic Assembly member Patrick Ahrens would set the minimum credit for low-income earners at $300.

“I know as a freshman, increasing that is not going to be easy. It's not going to be easy in normal budget times, let alone what is happening here,” he said.

With Los Angeles fire recovery and the cuts President Trump has threatened to federal funding, California could have a tighter budget than it previously planned for this year. 

Assembly Bill 397 from Los Angeles Democratic Assembly member Mark González would gradually raise the age for the young child tax credit. Currently, families can apply for that benefit until their child turns 6 years old. This would eventually include families of children up to 17 years old. It would also phase in families with young adults in college, up to 23 years old. 

“No child should ever have to grow up in poverty, worried about whether or not there's enough money to have food on their table, having to do homework and after school activities. I myself had to worry about that,” González said. 

The California Budget and Policy Center released a report in January showing the state’s tax credits for residents with low incomes, young children or experience in the foster system provide about $1.4 billion each year. 

Advocates like Van Felden are also pushing for more money in the state budget for free tax prep — which would help keep the tax prep bus on the road. 

Correction: An earlier version of this story incorrectly stated the owner of the VITA Bus as United Ways of California. The VITA bus is owned by the Community College Foundation.