BILL NUMBER: AB 509 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 25, 2011
INTRODUCED BY Assembly Member Skinner
FEBRUARY 15, 2011
An act relating to taxation. An act to
amend Sections 19851, 19852, and 19853 of the Revenue and Taxation
Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 509, as amended, Skinner. Personal income taxes:
earned Federal earned income tax credit:
notification. notification: state departments
and agencies.
The Personal Income Tax Law authorizes various credits
against the taxes imposed by that law. The federal income
tax laws authorize law authorizes a
refundable earned income tax credit for certain low-income
individuals who have earned income and who meet certain other
requirements. Existing California law requires an employer, as
defined, to notify all employees that they may be eligible for the
federal earned income tax credit (EITC), as specified.
This bill would also require state departments and agencies that
serve those qualified for the EITC, as defined, to notify their
program recipients that they may be eligible for the EITC, at least
once a year during the months of January through April, or
alternatively, to provide this annual notification during a regularly
scheduled contact with a recipient by telephone, mail, or electronic
communication, or by an in-person communication, as specified.
This bill would declare the Legislature's intent to enact
legislation that would create a pilot project requiring local
community-based coalitions, utilities, and schools to provide the
public with eligibility information regarding the earned income tax
credit.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19851 of the Revenue
and Taxation Code is amended to read:
19851. The Legislature finds and declares as follows:
(a) Congress created the federal earned income tax credit (EITC)
in 1975 to offset the adverse effects of the Medicare and social
security payroll taxes on working poor families and to encourage
low-income workers to seek employment rather than welfare.
(b) Due to a relatively low percentage of federal earned income
tax credit eligible persons that participate in the federal Earned
Income Tax Credit program, hundreds of millions of federal dollars go
unclaimed by the working poor in California.
(c) In order to alleviate the tax burden on working poor persons
and families, to enhance the wages and income of working poor persons
and families, to ensure that California receives its share of the
federal money available in the federal Earned Income Tax Credit
program, and to inject additional federal money into the California
economy, the state shall facilitate the furnishing of information to
working poor persons and families regarding the availability of the
federal earned income tax credit so that they may claim that credit
on their federal income tax returns.
(d) It is the intent of this act to offer the most cost-effective
assistance to eligible taxpayers through notices provided by
their employers. the following:
(1) Notices provided by their employers.
(2) Notices provided by state departments and agencies that serve
those qualified for the EITC.
SEC. 2. Section 19852 of the Revenue
and Taxation Code is amended to read:
19852. For purposes of this part, the following terms have the
following meanings:
(a) "Employer" means any California employer who is subject to,
and is required to provide, unemployment insurance to his or her
employees, under the Unemployment Insurance Code.
(b) "Employee" means any person who is covered by unemployment
insurance by his or her employer, pursuant to the Unemployment
Insurance Code.
(c) "EITC" means the federal earned income tax credit, as defined
in Section 32 of the Internal Revenue Code.
(d) "State departments and agencies that serve those qualified for
the EITC" means those departments that operate state or federally
funded programs primarily engaged in providing services to low-income
individuals and families. Departments, agencies, and programs under
this subdivision may include, but are not limited to, the following:
(1) The California Health and Human Services Agency.
(2) The State Department of Public Health.
(3) The State Department of Education: free or reduced-price meal
program and National School Lunch Program.
(4) The State Department of Social Services: the CalWORKs program,
CalFresh, Foster Families.
(5) The Department of Veterans Affairs.
(6) The Public Utilities Commission: California Alternate Rates
for Energy, the Energy Savings Assistance Program, Payment Plans, and
Emergency Payment Assistance Programs, including Family Electric
Rate Assistance, the California Weatherization Assistance Program,
the Low Income Home Energy Assistance Program, the California
LifeLine Telephone Program, and Link-Up.
(7) Department of Insurance: California's Low Cost Auto Insurance
Program.
(8) Employment Development Department: California Unemployment
Insurance.
(9) State Department of Health Care Services: the Medi-Cal
program.
(10) Managed Risk Medical Insurance Board (MRMIB): the Healthy
Families Program.
(11) California Student Aid Commission.
SEC. 3. Section 19853 of the Revenue
and Taxation Code is amended to read:
19853. (a) An employer shall notify all employees that they may
be eligible for the EITC within one week before or after, or at the
same time, that the employer provides an annual wage summary,
including, but not limited to, a Form W-2 or a Form 1099, to any
employee.
(b) The state departments and agencies that serve those qualified
for the EITC, as defined in subdivision (d) of Section 19852, shall
notify their program recipients that they may be eligible for the
EITC, at least once a year during the months of January through
April, or alternatively, shall provide this annual notification
during a regularly scheduled contact with a recipient by telephone,
mail, or electronic communication, or by an in-person communication.
Departments, agencies, and programs are encouraged to develop the
least costly, effective method to provide notice to recipients of
EITC eligibility, which method shall meet the requirements of Section
19854.
(b)
(c) The employer shall provide the notification
required by subdivision (a) by handing directly to the employee or
mailing to the employee's last known address either of the following:
(1) Instructions on how to obtain any notices available from the
Internal Revenue Service for this purpose, including, but not limited
to, the IRS Notice 797 and Form W-5, or any successor notice or
form.
(2) Any notice created by the employer, as long as it contains
substantially the same language as the notice described in paragraph
(1) or in subdivision (a) of Section 19854.
(c)
(d) The employer shall not satisfy the notification
required by subdivision (a) by posting a notice on an employee
bulletin board or sending it through office mail. However, these
methods of notification are encouraged to help inform all employees
of the EITC.
(d)
(e) Every employer shall process, in accordance with
federal law, Form W-5 for advance payments of the EITC, upon the
request of the employee.
SECTION 1. The Legislature hereby declares its
intent to enact legislation that would create a pilot project
requiring local community-based coalitions, utilities, and schools to
provide the public with eligibility information regarding the earned
income tax credit.