CALETIC4ME
Working Family Tax Credits
Working family tax credits are powerful tools to reduce a household’s tax burden. Some of these credits are “refundable,” meaning if the credit amount exceeds what the household owes in taxes, the IRS sends the difference as a cash payment.
These credits are among the most efficient and impactful social programs, costing only 1% in administrative overhead-far lower than programs like SNAP and SSI, which have overheads of 9% and 10%, respectively.
What’s more, working family tax credits are post-tax, meaning they don’t count as income for eligibility in other social programs. As a result, nearly all the funds spent on tax credits end up in the pockets of working families. The government recoups 83% of these costs in the first year, and nearly all costs over time through increased taxes and reduced reliance on other programs.
Earned Income Tax Credits (EITC)
EITC is available to working families earning less than 200% of the Federal Poverty Level.
A family of four can receive up to $7,000 through the EITC, depending on income. In California, families with income under $31,000 can qualify for an additional $3,644 through the state’s version of EITC.
EITC is crucial for reducing economic inequality and supporting low-income working Americans. It has significantly reduced income disparities between Black and white households
Child Tax Credits
The Child Tax Credit provides a $1,154 credit per qualifying child with a Social Security number. Unlike other credits, eligibility isn’t restricted to U.S. citizens-filers can earn up to $200,000 ($400,000 for married couples). If you’re a Californian qualifying for both the federal CTC and the California Earned Income Tax Credit (CALEITC), you can receive an additional $1,154 per child through the state’s CTC program.
CTC has proven to be effective in combating child poverty and promoting intergenerational economic mobility. During the pandemic, the expanded federal CTC cut child poverty by half. However, after the policy expired, child poverty quickly rose back to pre-pandemic levels-demonstrating how essential this credit is. Federal CTC expansion also reduced child abuse, emergency room visits, and injuries.
State Tax Credits
31 states have their own version of the EITC, and 11 have state Child Tax Credits. Many state programs have the flexibility to offer more inclusive credits, including to households without U.S. citizens. For example, California only requires an ITIN number for both the Earned Income and Child Tax Credits. Research has shown that state-run EITC programs reduce foster care entries. California also offers a Foster Youth Credit, which is part of the CALEITCAMe initiative for the 2025 tax season. This credit supports Transition-Age Youth (TAY), providing them with $1,154 annually, which has already shown promise in reducing youth homelessness.
However, billions of dollars in EITC and CTC benefits go unclaimed each year.
THE PROBLEM
Despite their far-reaching impact, $7 billion in EITC benefits are left unclaimed every year. This happens for two main reasons: 3.3 million eligible households don’t file taxes, and 1.7 million file their taxes but don’t know they qualify for EITC.
In California alone, 720,000 families miss out on more than $1.8 billion in federal EITC, plus additional state credits. The unclaimed benefits translate to massive economic losses-over $2.3 billion in business sales, over 14,500 lost jobs, $800 million in lost wages, and $150 million in lost tax revenue for state and local governments.
THE SOLUTION CalEITC4Me
To help families claim the tax credits they’re owed, F4GI has partnered with Golden State Opportunity to develop the updated CALEITC4Me Tax Credit Calculator for the 2025 tax season. This easy-to-use tool helps users determine eligibility for five different tax credits: Federal and California Earned Income Tax Credits, Federal and California Child Tax Credits, and the Foster Youth Tax Credit. For a family of four, CALEITC4Me can identify up to $20,000 in potential annual cash benefits-essentially doubling their income.
The calculator addresses two major barriers:
- Families Who Don’t File Taxes: Many low-income families don’t file taxes because their income is below the filing threshold. CALEITC4Me alerts them to their eligibility for EITC and CTC and connects them with free tax filing services
- Families Who File but Miss Out on Credits: Some families file their taxes but miss out on credits due to missing paperwork. CALEITC4Me helps them identify and complete the necessary forms.