Note: Effective January 1, 2021, taxpayers who have an Individual Taxpayer Identification Number (ITIN) may be eligible to receive the California Earned Income Tax Credit (CalEITC) on their California income tax return.
Who qualifies for the CalEITC
A taxpayer qualifies for the CalEITC if all of the following are true:
- The taxpayer and spouse have a valid SSN or ITIN.
- Qualifying children meet rules similar to the federal EIC rules.
- If married, must file Married Filing Jointly.
- Must have lived in California for more than half the year.
- Must file either Form 540, 540EZ, or 540NR.
- Must be at least 18 years old or have a qualifying child
- Must have earned income. (Note that IHSS payments can be included or excluded as desired.)
- The adjusted gross income must be $30,000 or less.
What disqualifies a taxpayer from receiving CalEITC
The taxpayer does not qualify for the CalEITC if any of the following are true:
- Non-MFJ filers if either the taxpayer or spouse was a nonresident alien for any part of the year.
- Filing Married Filing Separately.
- MFJ filers filing Form 540NR who lived in the state for less than 184 days.
- Foreign earned income is reported on federal Form 2555.
- Taxpayer must qualify for Federal EITC
- Investment income greater than $3,882.
- The taxpayer could not be a qualifying child of someone else, subject to certain conditions.
From the California Tax Return Menu in TaxSlayer Pro select:
- Total Payments
- CA Refundable EIC (3514)
- Answer the two questions re federal EIC and CalEITC being disallowed.
- Verify the net investment income and earned income amounts are correct and adjust as needed, in particular including or excluding IHSS and also excluding prisoner income and nonqualified pension plan income.
- Verify the qualifying child information is correct.
- Complete the paid preparer information for Form 3596.
Note: This is a guide on the California Earned Income Tax Credit in the TaxSlayer Pro program. It is not intended as tax advice.