State CTC and EITC

Extending the California Earned Income Tax Credit to Postsecondary Students

03. 03. 2021

Extending the maximum CalEITC to independent students would deliver about $46 million in benefits to 146,000 California taxpayers.

This article originally appeared in the Urban Institute.

Postsecondary education can be a critical step toward financial independence. Total college costs in California may present an extraordinary financial burden. For students with incomes under $30,000 in California, the cost of attendance at public universities (after accounting for existing grant aid) consumes about half of a person’s household income. Extending the maximum California earned income tax credit (CalEITC) to students who are independent for tax purposes, including students with no earnings, would increase the CalEITCs for 6 percent of independent students with income below $30,000 and make 8 percent of students with income below $30,000 newly eligible for benefits. The proposal would deliver $46 million in additional benefits each year to 146,000 students (11 percent of all independent students).