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SB-1409 Franchise Tax Board: California earned income tax credit: non-filer: report.(2019-2020)

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Date Published: 03/25/2020 09:00 PM
SB1409:v98#DOCUMENT

Amended  IN  Senate  March 25, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1409


Introduced by Senator Caballero

February 21, 2020


An act to amend Section 17052 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


SB 1409, as amended, Caballero. Franchise Tax Board: California earned income tax credit. credit: non-filer: report.
Existing law requires every individual taxable under the Personal Income Tax Law to make a return to the Franchise Tax Board, stating specifically the items of the individual’s gross income from all sources and the deductions and credits allowable, if the individual has adjusted gross income in excess of a specified amount for the taxable year.
The Personal Income Tax Law, beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows an earned income tax credit California Earned Income Tax Credit (CalEITC) against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor, as specified.
This bill would require the Franchise Tax Board to analyze and develop a plan to implement a “no return” tax filing pilot program with the goal of increasing the number of claims of the CalEITC. The bill would require the analysis to include an overview of the changes needed to the income tax system that would reduce any barriers to tax filing for non-filers of tax returns who are eligible for the CalEITC and an outline of the necessary changes needed to increase collaboration and coordination among state agencies to reach the greatest number of individuals eligible for the CalEITC. The bill would require the Franchise Tax Board to report to the Legislature on or before January 1, 2022, on its analysis and plan.

This bill would make a nonsubstantive change to those provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The federal Earned Income Tax Credit is one of the most effective poverty-reduction programs.
(b) In 2015, California established the California Earned Income Tax Credit (CalEITC) to build on the success of the federal Earned Income Tax Credit and to reduce poverty and boost employment.
(c) California has worked to ensure more people are eligible for this important safety net program by expanding the CalEITC to include self-employed workers and workers who are 18 to 24 years of age and 65 years of age and older, and increasing the income eligibility limits of the CalEITC.
(d) The federal Earned Income Tax Credit lifts millions of children out of poverty.
(e) California continues to have the highest number of people living in poverty under the Supplemental Poverty Measure of the United States Census Bureau, which takes into account the cost of living.
(f) California needs a multifaceted approach to increase the number of CalEITC claims among eligible individuals and families.
(g) It is the intent of the Legislature to do both of the following:
(1) Improve California’s tax system by removing barriers to tax filing for low– and very low–income families to increase the number of CalEITC claims.
(2) Develop methods of collaboration and coordination between state agencies to lead to optimal government efficiency to achieve paragraph (1).

SEC. 2.

 (a) The Franchise Tax Board shall analyze and develop a plan to implement a “no return” tax filing pilot program with the goal of increasing the number of claims of the California Earned Income Tax Credit (CalEITC) allowed pursuant to Section 17052 of the Revenue and Taxation Code.
(b) The analysis shall include, but is not limited to, an overview of the changes needed to the income tax system that would reduce any barriers to tax filing for non–filers of tax returns who are eligible for the CalEITC and an outline of the necessary changes needed to increase collaboration and coordination among state agencies to reach the greatest number of individuals eligible for the CalEITC.
(c) The Franchise Tax Board shall engage any state agency task force or group that exists to reduce poverty and other stakeholders that work to reduce poverty.
(d) The Franchise Tax Board shall report to the Legislature on or before January 1, 2022, on its analysis and plan required by this section. The report shall be submitted in compliance with Section 9795 of the Government Code.