Personal income taxes: credits: child poverty tax credit.
The bill would have a significant impact on state law by expanding the current framework of personal income tax credits available to low-income families, promoting financial assistance directly aimed at alleviating child poverty. By allowing these credits to exceed tax liabilities, the bill aims to ensure that qualified taxpayers receive financial relief through direct payments from the Tax Relief and Refund Account, effectively making it a tool for direct economic support.
Senate Bill 1140, introduced by Senator Caballero, seeks to amend Section 17052.1 of the Revenue and Taxation Code to establish a refundable child poverty tax credit in California. This credit is intended to reduce poverty among the state's low-income families with children, building on existing tax credits like the young child tax credit which began in 2019. The proposed child poverty tax credit would offer eligible taxpayers a credit of up to $2,940 if they reside in Region 1 counties and $2,353 for those in Region 2, both depending on specific income thresholds and adjustments related to the earned income tax credit.
Notable points of contention may arise regarding the bill's budget implications, as it mandates appropriations from the Tax Relief and Refund Account for the allocation of these tax credits. Additionally, discussions might focus on the sufficiency of the proposed amounts in addressing actual poverty levels, with varying opinions on whether the thresholds set for eligibility correctly reflect the cost of living across different regions of California.