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State of California Franchise Tax Board

California Earned Income Tax Credit (Cal EITC)

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California now offers its own Earned Income Tax Credit (Cal EITC) starting with calendar year 2015 tax returns. This is a new refundable tax credit that puts money back in the pockets of California’s working families and individuals this tax season.

If you owe taxes, the Cal EITC reduces the amount of taxes you might owe and may allow you a refund when you file your taxes. If you do not owe taxes, the Cal EITC tax credit will provide you with a tax refund when you file your taxes.

Find your filing status below to see how much you may qualify for, view the 2015 Earned Income Tax Credit Table, or use the CalEITC4Me online calculator to estimate your credit:

Number of Qualifying Children CA Maximum Income Cal EITC (up to) IRS EITC (up to)
None $6,580 $214 $503
1 $9,880 $1,428 $3,359
2 $13,870 $2,358 $5,548
3 or more $13,870 $2,653 $6,242

This credit is available to California households with adjusted gross incomes of less than $6,580 if there are no qualifying children, less than $9,880 if there is one qualifying child, or less than $13,870 if there are two or more qualifying children.

You qualify for Cal EITC if:

  • You have wages and adjusted gross income within certain limits, AND
  • You, your spouse, and any qualifying children each have a social security number issued by the Social Security Administration that is valid for employment, AND
  • You do not use the “married/RDP filing separately” filing status, AND
  • You lived in California for more than half the tax year.
Qualification Description
Earned Income Eligible sources of earned income from:
  • W-2 wages.
  • Salaries, tips.
  • Other employee compensation subject to California withholding.
Note: For Cal EITC, earned income does not include income from self-employment.
Maximum Income Limit Both your adjusted gross income and earned income (defined above) must be no more than:
  • $6,580 if there are no qualifying children.
  • $9,880 if there is one qualifying child.
  • $13,870 if there are two or more qualifying children.
Your investment income, such as interest, dividends, royalties, and capital gains cannot exceed $3,400 for the entire tax year.
Filing Status You may file as:
  • Single.
  • Married/Registered Domestic Partner (RDP) filing jointly.
  • Head of Household (HOH).
Note: Married/RDP Filing Separately status may not be used.
Qualifying Child Your qualifying child must meet 3 criteria:
  • Relationship - Is the taxpayer’s child, stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of any of them.
  • Residence - Had the same principal residence as the taxpayer in California for more than half the tax year. Certain exceptions apply.
  • Age - Child must be younger than the taxpayer and either a) under the age of 19 at the end of the tax year, or b) under the age of 24 if a full-time student for at least 5 months of the year. A permanently and totally disabled child may be included at any age.

The child only qualifies for one return.  If the child can be claimed by more than one taxpayer, the child’s qualification goes to:

  • The parent.
  • If more than 1 taxpayer is the child’s parent, the parent with whom the child lived for the longest time during the year, or if the time was equal, the parent with the highest adjusted gross income (AGI).
  • If no eligible parent claims the child, the individual claiming the child, if the individual's AGI exceeds the AGI of any parent eligible to claim the child.
If no taxpayer is the child’s parent, the taxpayer with the highest AGI.
Residency Your principal residence must be in California for more than half the tax year.
Age If you do not have a qualifying child, you (or your spouse if you file a joint return) must be between 25 and 65 years old at the end of the tax year.

You will need to file a California income tax return and complete an FTB 3514, Earned Income Tax Credit form (FTB 3514 Instructions).

There are a few options:

We created 5 new notices to help administer the new Cal EITC. All Cal EITC notices are tax year specific. If you receive one of these notices, please read it carefully as it will contain specific information to assist you in responding.

The following is a brief description of each notice:

Notice Reason you received it
FTB 4502, Additional Documentation Required - Refund Pending We send this notice when we determine we do not have enough information to approve the claimed Cal EITC prior to processing the tax return and issuing a refund. This notice provides specific instructions on the type(s) of supporting documentation a taxpayer must submit to validate the claimed Cal EITC.

If we do not receive the required supporting documentation within 30 days of the notice date, we will not issue a refund in the amount of the claimed Cal EITC, but rather will send FTB 5818, Notice of Tax Return Change to the taxpayer advising them of the adjustment. 

If we receive the required supporting documentation to substantiate the claim, we will issue the refund within 8 weeks of receiving the documentation.

If we receive the required supporting documentation and the information does not substantiate the claim, we will not issue the refund and send FTB 5818, Notice of Tax Return Change to the taxpayer advising them of the adjustment.

If we receive the required supporting documentation and the information only substantiate part of the claim, we will issue a refund with an adjustment code and FTB 1020 insert to the taxpayer advising them of the adjustment.

Send the required documentation to:

916.845.9351 (Fax)

or

FILING COMPLIANCE BUREAU MS F-151
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO, CA 95812-1468

FTB 4513, Earned Income Tax Credit - Acceptance Letter

We send this notice when a taxpayer submits the required supporting documentation to substantiate their claimed Cal EITC and we accept the documentation. This notice serves as confirmation we accepted the claimed Cal EITC for the tax year on the notice.

This notice is only sent after a FTB 4514, Additional Documentation Required - Refund Issued or FTB 5818 Notice of Tax Return Change has been sent to a taxpayer.

FTB 4514, Additional Documentation Required - Refund Issued

We send this notice when we determine we do not have enough information to confirm the taxpayer qualified for the claimed Cal EITC and we already processed the tax return and issued a refund.

This notice provides specific instructions on the type(s) of supporting documentation the taxpayer must submit to validate the claimed Cal EITC.

If we do not receive the required supporting documentation within 30 days of the notice date, or the provided documentation does not substantiate the claimed Cal EITC, we will send FTB 4515, Earned Income Tax Credit – Adjustment Made to the taxpayer advising them of the adjustment.

Send the required documentation to:

916.845.9351 (Fax)

or

FILING COMPLIANCE BUREAU MS F-151
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO, CA 95812-1468

FTB 4515, Earned Income Tax Credit – Adjustment Made

We send this notice when we receive insufficient documentation or do not receive a response after sending FTB 4514, Additional Documentation Required - Refund Issued. This notice indicates we adjusted the claimed Cal EITC and provides the specific reason(s) for the adjustment.

In addition, the notice provides the taxpayer(s) with options should they disagree with the decision to adjust their Cal EITC.

FTB 4516, Earned Income Tax Credit Denial We send this notice when:
  • A taxpayer files a Formal Claim for Refund that we denied. We include information on how to file an appeal with the Board of Equalization.
  • We deny the Cal EITC with a balance due. We include how to pay instructions and how to file a Formal Claim for Refund.

The federal EITC is a refundable federal credit that can reduce the federal tax you owe or result in a refund to you. To find out if you are eligible to claim the federal EITC on your federal tax return, you can:

Paid preparers must meet due diligence requirements when they determine a taxpayer's eligibility for, and the amount of, the California Earned Income Tax Credit (Cal EITC).  Generally, if a preparer prepares Cal EITC claims, a preparer must ask all the questions required on FTB 3596, Paid Preparer's California Earned Income Tax Credit Checklist, as well as, ask additional questions when the information the client gives seems incorrect, inconsistent, or incomplete. 

Preparers must complete and submit the FTB 3596 for all paper and electronic tax returns and all other Cal EITC claims. The form is required for all Cal EITC claims with a qualifying child and claims with no qualifying child. Also, preparers must keep a copy of the completed FTB 3596 and the worksheet showing the Cal EITC computation contained in the instructions of FTB 3514, California Earned Income Tax Credit.

If paid preparers fail to comply with due diligence requirements, the Franchise Tax Board may assess a $500 penalty for each failure. 

For more information, see Internal Revenue Code Section 6695(g), Treasury Regulation section 1.6695-2, and FTB 3596. 

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