AB 1942: California Earned Income Tax Credit: Earned Income Tax Credit Information Act.

The Personal Income Tax Law allows various credits against the taxes imposed by that law, including certain credits that are allowed in modified conformity to credits allowed by federal income tax laws. Federal income tax laws allow a refundable earned income tax credit (EITC) for certain low-income individuals who have earned income, as specified and who meet certain other requirements.

The Personal Income Tax Law, in modified conformity with federal income tax laws, allows an earned income credit against personal income tax, and a payment in excess of that credit amount, to an eligible individual that is equal to that portion of the EITC allowed by federal law as determined by the EITC adjustment factor as set forth in the annual Budget Act which, unless otherwise specified in that act, is 0%.

This bill would require the Franchise Tax Board to revise the Form 540 to include specified language relating to claiming the California EITC on the Form 3514 and to revise the Form 540 2EZ to attach the Form 3514.

Existing law, the Earned Income Tax Credit Information Act, requires state departments and agencies that serve those who may qualify for the federal EITC and the California EITC to notify their program recipients that they may be eligible for the federal EITC and the California EITC, as provided. Existing law defines state departments and agencies that serve those who may qualify for the federal EITC and the California EITC to mean certain programs in the State Department of Education, the Employment Development Department, and the State Department of Health Care Services.

This bill would expand the definition of state departments and agencies that serve those who may qualify for the federal EITC and the California EITC to include the California Work Opportunity and Responsibility to Kids (CalWORKs) program in the State Department of Social Services and would require those state departments and agencies that serve those who may qualify for the federal EITC and the California EITC to additionally provide the Internet Web site address of the Form 540 2EZ and a physical paper copy of the Form 540 2EZ to those program recipients who may be eligible for the federal EITC and the California EITC.