Lieu Proposes Legislation To Notify Taxpayers About The Earned Income Tax Credit

Sacramento, CA – Assemblymember Ted Lieu (D-Torrance) yesterday introduced AB 650, legislation that would require increased notification to California taxpayers who might be eligible to take advantage of the federal Earned Income Tax Credit.

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low-income working individuals and families. Approved by Congress in 1975, the EITC currently provides up to $4,536 in the form of a tax credit for eligible taxpayers earning less than $38,348 in income.

According to the California State Controller’s office, nearly 460,000 California families who may have qualified for the EITC did not claim it in 2005, thus forgoing over $850 million in potential refunds.

“Too many hard-working Californians are missing out on this very important break on their federal income taxes,” said Assemblymember Ted Lieu. “We must reach out to needy California families, inform them about the EITC, and direct them to the appropriate resources on how to claim it.”

Lieu pointed out that, if more Californians claimed this credit, the effect would be far greater than the amount of money received.  If even a portion of that money were spent, saved, or invested in California, the multiplier effect on the State’s economy could be in the billions of dollars.

This weekend, Assemblymember Lieu will be discussing AB 650 and the EITC in the Democratic Weekly Radio address available on radio stations throughout California.