Bill > AB397

This bill amends California's Personal Income Tax Law to gradually expand the young child tax credit by increasing the age of qualifying children over several years. Currently, the credit applies to families with children under 6 years old, but the bill proposes to incrementally raise the age limit: to children under 10 years old in 2025, under 13 years old in 2026, under 16 years old in 2027, and ultimately returning to the standard definition in 2028. The credit amount is calculated based on the earned income tax credit adjustment factor and is designed to reduce poverty among California's poorest working families, with the credit amount decreasing as a family's income increases. The bill requires the Franchise Tax Board to annually report on the credit's impact, including the number of tax returns claiming the credit, the number of qualifying children, and the average credit amount. Notably, the bill explicitly states that undocumented persons who are otherwise qualified can also claim this tax credit. The legislation aims to provide additional financial support to low-income families with young children by gradually expanding the age range of children eligible for the tax credit.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB397