California’s inaugural use of a state earned income tax credit has put more than $9 million in the pockets of low-income workers in Orange County.
The money issued to local wage earners is part of more than $189 million that so far has gone to California households, according to a snapshot by the Franchise Tax Board based on 2015 state tax returns processed as of early July.
On average, $421 went to eligible Orange County households – money that advocates of the so-called CalEITC said could be used for such staples as groceries, gas, clothing and paying bills.
The tax credit is a cash benefit to eligible workers that can only be claimed by filing an income tax return. The benefit for some recipients was expected to range up to $2,653, depending on income and number of children in a household.
Of the 384,028 CalEITC claims submitted statewide, about 58,000 came from first-time tax filers. The state allowed 364,842 claims, but that represents just over half the wage earners thought to be eligible for the tax credit.
And some 55,000 Californians eligible for the CalEITC did not claim it on their tax returns. The Franchise Tax Board has alerted those households by mail that they can amend their 2015 returns to claim the credit.
California, with a budgeted allocation of $380 million to cover the tax credit, joined 24 other states and the District of Columbia this year in making the EITC available. There is also a federal tax credit, with broader income eligibility.
In Orange County, 22,214 households received a portion of $9.35 million credited back to wage earners. Six other counties outpaced that total dollar amount: Los Angeles, San Bernardino, San Diego, Riverside, Sacramento and Fresno.
A statewide publicity campaign headed up by Orange County native and financial entrepreneur Joseph Sanberg used free tax preparation clinics, community events, social media and ethnic news outlets to get the word out to people in needy communities and often overlooked neighborhoods.
“We couldn’t have done it without so many hardworking local and statewide partners who stood with us to help lift working people and families out of poverty,” Sanberg said.
Sanberg, a successful Wall Street investor interested in economic equality, put $2.5 million of his own money into the public outreach. He said he wants to see eligibility for CalEITC expanded beyond its $13,870 annual income threshold.
Sanberg is already gearing up efforts for next tax season: “We continue to believe that in addition to the very real benefit that every recipient of a CalEITC refund receives, the program will not be expanded unless people continue to claim it.”
Source article: http://www.ocregister.com/articles/tax-727358-credit-income.html