San Joaquin Valley’s working women get a boost from earned-income tax credit

As we approach Tax Day on April 15, we’d like to take a moment and reflect on a policy that is having tremendous success helping women, especially single mothers, attain financial security. That policy is the Earned Income Tax Credit (EITC), a cash-back program that puts money in the pockets of low-income workers.

At a recent Family Resource Fair in Fresno with California First Partner Jennifer Siebel Newsom, we heard from hardworking mothers who said their state and federal EITC refund is a lifeline, helping them to stay afloat in a difficult economy. One woman, who had lost her husband, said she works two to three jobs while attending night classes, and relies on her mother for child care. She said her EITC refund allowed her to fix her car, put money in savings, and send her kids on school trips.

In just the first two months of 2019, California’s Earned Income Tax Credit (Cal EITC) has returned more than $50 million to workers in the Central Valley who are making less than $25,000 annually, according to the latest figures from the Franchise Tax Board. We learn from state figures that $9 out of every $10 Cal EITC dollars goes to a parent, and among eligible parents 70 percent are women.

Since it was passed in the 1970s, the federal EITC has helped women enter and advance in the labor force by making entry-level work pay better. Economists at UC Irvine found that single mothers who were able to benefit from a more generous EITC during their 20s and 30s went on to have substantially higher earnings later in their careers. By increasing the value of their work when they were just starting out, these women are able to invest in new skills and professional development — like night school classes — which allow them to become financially self-sufficient over the long-haul.

For decades, states have supplemented the federal EITC with their own versions of this credit, but here in California, our state EITC is relatively new. We passed it into law in 2015 and have steadily expanded it over the last several years. Despite its newness, we can already see that the Cal EITC is paying dividends for women in the Golden State.

The program is tremendously impactful. Last year, 1.4 million Californians claimed $346 million through the Cal EITC. The Cal EITC can be claimed throughout the year, not just during tax season. Statewide, in during the first two months of 2019, already 827,000 Californians have claimed $180 million in Cal EITC. That’s a 40 percent increase in claims over the same period last year.

A new generation of women in their 20s and 30s is entering the workforce and trying to get ahead. We have the tools to help them succeed in their careers. Now it’s a matter of getting the word out about the Cal EITC — so that everyone who is eligible receives their credit — and making sure that, as a state, we continue to support in this impactful program.

For more information on how to find out if you or your loved ones are eligible for the Cal EITC, please visit CalEITC4Me.org, or text ‘EITC’ to 555-888.