It is an appalling reality in a state as flourishing as California: hundreds of thousands of hard-working people and families do not even claim a penny of their millions of dollars in tax refunds annually. This is not a lottery game, but more a gimmick, but true, it is the California Earned Income Tax Credit (CalEITC), which is a strong form of a tax credit aimed at putting money back into the pockets of the most needy individuals.
In case you were employed the previous year and earned a low to an average income, chances are that you can be sure there is a check with your name printed on it. The problem? Most of them do not even know that they are eligible. You must look for efficient tax professionals (like a California tax lawyer) who will understand your issues and find valuable solutions.
Understand the Basics of CalEITC
The CalEITC is a state tax credit that is refundable for working Californians. The important term is refundable, which implies that you will be refunded even in a scenario where you do not owe any taxes to any state. When you qualify for the credit either adds to your tax refund or subtracts from what you owe.
Who Can Qualify for CalEITC?
It Could Be Less Complicated Than You Think.
The assumption that many people make is that they do not earn enough to file taxes or that they will not qualify. Let’s clear that up. To qualify in the 2023 tax year (which you will report in 2024), you must:
- Have received income either in the form of a job, self-employment, or some other form.
- Pass the income qualification criteria, which are supposed to cover a broad spectrum of employees.
- As an example, you may be able to qualify with an income up to about $33,000 in case you have more than three qualifying children.
- Be a citizen possessing a valid social security number (ITIN in your case, and your spouse and any additional children who can qualify).
- Complete a state tax filing, even though your income is less than the standard amount for which you are required to file.
Tips that Will Improve Your Chances of Getting the Refund
a) Look for the Young Child Tax Credit
Don’t forget the Young Child Tax Credit: When you have a child under the age of 6 and you qualify to receive the CalEITC, you can receive another deduction of up to $1,000, which is the young child tax credit. That is free diapers, formula, and childcare.
b) File with an ITIN
When you, your spouse, or your children have an Individual Taxpayer Identification Number (ITIN): You can still receive CalEITC. Do not forget to update your ITIN because it will slow you down. Consultation with an expert (like an IRS tax lawyer in California) will surely help you manage your tax affairs.
It is your and your community’s money. It is aimed at the working population to have a more stable future. You are not only getting a refund by making this simple step to file, you are also claiming a resource that was created to serve you. Give this information to a friend, a family member, or a colleague. Let us ensure that everyone does not leave money on the table.
