BILL NUMBER: AB 509 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MARCH 25, 2011
INTRODUCED BY Assembly Member Skinner
FEBRUARY 15, 2011
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. Federal earned income tax credit:
notification: state departments and agencies.
The federal income tax 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 who may qualify
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 also
require state departments and agencies that do not directly
communicate with persons who may qualify for the EITC to communicate
indirectly through agencies or districts serving those persons.
Vote: majority. Appropriation: no. Fiscal committee: 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 who
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 the following:
(1) Notices provided by their employers.
(2) Notices provided by state departments and agencies that serve
those qualified who may qualify 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 who may qualify for the EITC" means
those departments and agencies 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)
(1) The State Department of Education: free or
reduced-price meal program and National School Lunch Program.
(4)
(2) The State Department of Social Services: the
CalWORKs program, CalFresh, Foster Families
and foster families .
(5) The Department of Veterans Affairs.
(6)
(3) 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)
(4) Employment Development Department: California
Unemployment Insurance.
(9)
(5) State Department of Health Care Services: the
Medi-Cal program.
(10)
(6) 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 who may qualify 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.
State departments or agencies that do not directly communicate with
persons or households with persons who may qualify for the EITC may
communicate indirectly through agencies or districts that serve
eligible persons or households with eligible persons.
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.
(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 Section 19854.
(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.
(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.