Filing Season Tax Tips
For Immediate Release
Sacramento — The Franchise Tax Board (FTB) kicked off the 2022 tax filing season this week, offering Californians tips on how to avoid tax scams, claim valuable cash-back tax credits, file a return for free, and more.
“We encourage Californians to use FTB’s online services, including free e-filing, and to file as early as possible for a faster refund,” said State Controller and FTB Chair Betty T. Yee. “Millions of taxpayers are expected to qualify for the California Earned Income Tax Credit, and many of them also will get the Young Child Tax Credit. Combined, these credits can be worth hundreds or even thousands of dollars to California taxpayers and their families.”
FTB began accepting state tax returns on January 3.
California Earned Income Tax Credit (CalEITC)
Californians with income up to $30,000 may qualify for CalEITC. Those who are eligible for CalEITC and have a child age five or younger also may receive up to $1,000 from the Young Child Tax Credit (YCTC). In addition, people earning less than $57,414 also may qualify for the federal EITC. Between CalEITC, YCTC, and the federal EITC, a family can receive up to $10,888.
CalEITC and YCTC are claimed by filing a state tax return, while the federal EITC is claimed on a federal return filed with the Internal Revenue Service. For more information about these credits, visit www.ftb.ca.gov/caleitc.
Homeless Hiring Tax Credit
California employers can receive a hiring tax credit for each qualified homeless individual they hire. The employer can tentatively make a reservation to claim the credit with FTB; a total of $30 million of credits is available annually. The credit is available for taxable years beginning January 1, 2022, through December 31, 2026. An employer may receive $2,500 to $10,000 through this tax credit per eligible employee hired, based on hours worked in the taxable year. Employers may claim up to $30,000 of credit per taxable year when filing their tax returns. For more information, go to ftb.ca.gov and search for homeless hiring credit.
Health Care Coverage Penalties
Californians who did not have qualifying health insurance throughout the year are subject to a penalty of $800 or more when they file their state tax returns. The penalty for a dependent child is half that of an adult; a family of four could face a penalty of $2,400 or more. If you had health coverage in 2021, check the “Full-year health care coverage,” box 92, on your state tax return to avoid penalties.
You can get health coverage and financial help at CoveredCA.com. It is crucial to get health coverage to avoid penalties when filing your tax return next year. For information, visit ftb.ca.gov/healthmandate.
State Tax Deduction for Losses from a Disaster
Taxpayers affected by governor-declared California wildfires may claim a disaster loss as a state tax deduction in the tax year when the disaster occurred. They also may file an amended or original return from the year before the disaster occurred. Upon request, FTB will provide replacement state tax documents for free for those who lost them due to a disaster. For more information and a complete list of all disasters declared by the governor, visit ftb.ca.gov and search for disaster loss.
Beware of Scams
FTB encourages taxpayers to protect themselves from scams. Scammers often prey on taxpayers by impersonating IRS or FTB employees. They may attempt to trick taxpayers into sending money not owed, or into providing personal information that could be used to file fraudulent returns and steal refunds. If you receive a letter from FTB or the IRS that appears suspicious, contact FTB at 800.852.5711 or IRS at 800.829.1040. Concerned taxpayers also may check the FTB Letters page or Understanding Your IRS Notice or Letter.
Free Tax Help and FTB Services
Taxpayers may be able to get help with their taxes for free. For a list of Volunteer Income Tax Assistance (VITA) program locations throughout California, go to ftb.ca.gov and search for free tax help. FTB offers free electronic filing for state tax returns through CalFile, an easy-to-use tool that allows taxpayers to file directly with FTB and provides instant confirmation. CalFile will be available starting January 18. Taxpayers can check if they qualify for CalFile and find a list of other filing options at ftb.ca.gov. Taxpayers also can use FTB’s MyFTB service to view their tax documents, check balances due, send secure messages to FTB staff, and more.
FTB administers two of California’s major tax programs: Personal Income Tax and the Corporation Tax. FTB also administers other non tax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, FTB’s tax programs collect more than 70 percent of the state’s general fund. For more information on other taxes and fees in California, visit: taxes.ca.gov.