BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | ACR 149|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: ACR 149
Author: Gipson (D)
Amended: 6/29/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/22/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Moorlach, Pavley
NO VOTE RECORDED: Lara
ASSEMBLY FLOOR: 76-0, 4/28/16 (Consent) - See last page for
vote
SUBJECT: Taxation
SOURCE: Author
DIGEST: This resolution encourages state entities to identify
and utilize existing and potential public or private
partnerships to inform citizens and employees about the
availability of the federal and state Earned Income Tax Credits,
and Volunteer Income Tax Assistance programs.
ANALYSIS:
Existing law:
1)Allows, pursuant to federal and state law, eligible
individuals a refundable earned income tax credit (EITC),
which allows the taxpayer to obtain a refund for the excess of
the credit over the taxpayer's liability.
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Page 2
2)Requires, pursuant to federal law, employers to notify their
employees that the employees may be eligible for the federal
EITC.
3)Requires, pursuant to state law, California employers, state
departments, and certain state agencies to provide formal
notification of possible eligibility for the federal EITC.
This resolution encourages state entities to identify and
utilize existing and potential public or private partnerships to
inform citizens and employees about the availability of the
federal and state EITCs, and Volunteer Income Tax Assistance
(VITA) programs.
Comments
1)The Notification Requirement Regarding the Federal EITC.
According to the IRS, California's federal EITC participation
rate in 2014 was 74.3%, which was lower than the estimated
national rate of 80%. Both federal and state laws require
employers to notify all employees that they may be eligible
for the federal EITC. Under federal law, an employer must
provide an employee with Form W-2, a substitute of W-2, Notice
797, or a written statement with the same wording as Notice
797.
Under California's Earned Income Tax Credit Information Act
(EITC Act), an employer must also notify employees about the
federal EITC within one week of providing an employee with
their annual wage summary (e.g., a Form W-2 or a Form 1099).
Employers are required to either hand the notice directly to
each employee or mail it to the employee's last known address.
Furthermore, all California employers must post a statement
about the EITC in the workplace. In addition, state law
requires certain specified state departments, agencies and
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programs serving individuals who may qualify for the federal
EITC to notify these individuals of the availability of this
credit and the ways to claim it. The current state law
encourages departments, agencies, and programs to develop the
least costly, as well as the most effective, methods to
provide notice.
2)Increasing Awareness. Under current state law, employers and
certain state agencies are already required to notify all of
their employees and recipients of state programs, whichever is
applicable, of possible eligibility for the federal EITC.
With the passage of the California EITC program, many
individuals in California are now entitled to claim the state
EITC. As such, sufficient outreach is critical in ensuring
that many eligible individuals will benefit from the state
EITC as well.
3)VITA Programs. The VITA program offers free tax help to
people who earn $54,000 or less, and persons with disabilities
and limited English speaking taxpayers who need assistance in
preparing their own tax returns. IRS-certified volunteers
provide free basic income tax return preparation with
electronic filing to qualified individuals. In addition to
VITA, the Tax Counseling for the Elderly program offers free
tax help for all taxpayers, particularly those who are 60
years of age and older, specializing in questions about
pensions and retirement-related issues unique to seniors. The
IRS-certified volunteers who provide tax counseling are often
retired individuals associated with non-profit organizations
that receive grants from the IRS.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified 6/28/16)
ACR 149
Page 4
Board of Equalization Member Jerome Horton
OPPOSITION: (Verified 6/28/16)
None received
ARGUMENTS IN SUPPORT: According to the author, "ACR 149 is
intended to raise awareness of an important program that is
offered to low-income taxpayers, with the goal of supporting
them in gaining the most out of their income tax returns. This
program is promoted by a number of state and local governments,
non-profits, and higher education institutions across the
nation. With the broad range of stakeholders involved, both
providing and receiving service, this is a community program
that deserves recognition and commendation."
ASSEMBLY FLOOR: 76-0, 4/28/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty,
Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Chávez, Daly, Mathis, Olsen
ACR 149
Page 5
Prepared by: Myriam Bouaziz / GOV. & F. / (916) 651-4119
6/29/16 15:56:29
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