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Parents Of Young Kids: California Wants To Give You Money

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Sara Sgarlata coordinates the free tax prep services at El Centro De Ayuda in Boyle Heights. (Mariana Dale/LAist )
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I'm not here to tell you that doing your taxes isn't incredibly stressful and confusing. (It can be).

But, if you're the parent of a young child in California filing this year I may have good news for you: You could receive up to an additional $1,000 back. That's on top of existing Earned Income Tax Credits which could net you hundreds - or thousands - of dollars (more on that later).

THE BASICS

This is the first year people can claim the state's Young Child Tax Credit.

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Parents of children under six, who made at least one dollar in 2019, and less than $30,000, can be eligible. But to get it, you must file a tax return.

Yes, technically, if you make below a certain amount of money, you don't have to file one. But people like Sara Sgarlata, who coordinates a free tax prep site in Boyle Heights, really, really want you to.

"Don't miss out on dollars that can go back in your pocket," Sgarlata said.

And remember, if you made less than $56,000 last year, you can get professional help filing your taxes for free. Find a place near you here.

(If you plan to file with TurboTax make sure you're not paying when it should be free. ProPublica reported more than 14 million people unnecessarily paid for the software last year.)

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HOW IT WORKS

The Young Child Tax Credit is what's called a refundable credit.

"You don't have to pay them back, you can use the money," said Franchise Tax Board spokesman Jason Montiel. "It's yours to use for whatever you need."

If you owe income tax, the credit chips away at what you owe.

If you file electronically, the direct deposit could show up in a few weeks. Sending your taxes by mail could take months.

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AND THERE'S MORE

People who get the Young Child Tax Credit also qualify for the state's Earned Income Tax Credit, which was created in 2015.

This is another way people who make less than $30,000 can get money back. The general rule is that people with lower earnings and/or more children qualify for larger credits.

You must also:

  • Be at least 18 years old (or if you're younger, have a child)
  • Have a valid social security number
  • Have lived in California for at least half the year

UNCLAIMED FREE MONEY

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The state estimates 400,000 people could qualify for the new Young Child Tax Credit.

But here's the problem. You have to file your taxes to get the tax credit money and many people -- for various reasons -- don't.

For example, with the state Earned Income Tax Credit, a survey from the California Budget and Policy Center found only one in five people who were eligible had even heard of the program.

Researchers have tried mailing people letters telling them about the tax credit and found it had basically no effect.

California is trying to fix this and offered $10 million in grants last year to help promote the tax credit programs and offer free tax prep help.

HERE'S WHAT YOU COULD GET:

One of the places offering help is El Centro De Ayuda in Boyle Heights.

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Elena Landa plans to use the money from her tax refund to pay rent, buy clothes for her daughters, save for an emergency and support family in Mexico. (Mariana Dale/LAist)

This is the second year Elena Landa has come here to file for taxes. The mom of three works as a dishwasher.

"Me siento un poco nerviosa," Landa said, admitting she was a little nervous that she didn't bring all her paperwork.

Within an hour, her taxes were done. Including the federal Earned Income Tax Credit (make sure to ask about that too), the state's version, and the new Young Child Tax Credit, her refund was more than $10,000.

She plans to use the money to pay rent, buy clothes for her daughters, save for an emergency and support family in Mexico.

"Gracias a dios por todo esto," Landa said. "Thank God."

Page 22 of CA Budget Center 1055 CalEITC Chartbook Update October 2019

Contributed to DocumentCloud by KPCC Documents of Southern California Public RadioView document or read text

Between state and federal credits, a parent can significantly boost their income. The California Budget and Policy Center estimates that a parent of two children who works full-time and made $24,000 last year could increase their income by 39%, and the same parent who made $6,000 would increase their income by 99%.

The federal Child and Earned Income Tax Credits work similarly to California's, but have slightly different rules.

"Tax credits are a very simple way to pull people out of poverty because they put cash in people's pockets," said Alissa Anderson, a senior policy analyst at the center.

If you want to see what you could qualify for, here's a handy calculator.