(a) It is the intent of the Legislature to do each of the following:
(1) Maximize the ability of CalWORKs recipients to benefit from the federal or state Earned Income Tax Credit (EITC), including retroactive EITC credits and the Advance EITC, take advantage of the earned-income disregard to increase their CalFresh benefits, and accumulate credit toward future social security income.
(2) Educate and empower all CalWORKs participants who receive the federal or state EITC to save or invest part or all of their credits in instruments such as individual development accounts, 401(k) plans, 403(b) plans, IRAs, 457 plans, Coverdell ESA plans, an account established pursuant to the California Secure Choice Retirement Savings Program (Title 21 (commencing with Section 100000), of the Government Code), restricted accounts pursuant to subdivision (a) of Section 11155.2, or 529 plans, and to take advantage of the federal Assets for Independence program and other matching funds, tools, and training available from public or private sources, in order to build their assets.
(b) It is the intent of the Legislature that counties encourage CalWORKs recipients to participate in activities that will maximize their receipt of the EITC. To this end, counties may do all of the following:
(1) Structure welfare-to-work activities pursuant to subdivisions (a) to (j), inclusive, of Section 11322.6 to give recipients the option of maximizing the portion of their CalWORKs benefits that meets the definition of “earned income” in Section 32(c)(2) of the Internal Revenue Code.
(2) Inform CalWORKs recipients of each of the following:
(A) That earned income, either previous or future, may make them eligible for the federal or state EITC, including retroactive EITC credits and the Advance EITC, increase their CalFresh benefits, and accumulate credit toward future social security income.
(B) That recipients, as part of their welfare-to-work plans, have the option of engaging in subsidized employment and grant-based on-the-job training, as specified in Section 11322.6, and that participating in these activities will increase their earned income to the extent that they meet the requirements of federal law.
(C) That receipt of the federal or state EITC does not affect their CalWORKs grant and is additional tax-free income for them.
(D) That a CalWORKs recipient who receives the federal or state EITC may invest these funds in an individual development account, 401(k) plan, 403(b) plan, IRA, 457 plan, 529 college savings plan, Coverdell ESA, an account established pursuant to the California Secure Choice Retirement Savings Program, or restricted account, and that investments in these accounts will not make the recipient ineligible for CalWORKs benefits or reduce the recipient’s CalWORKs benefits.
(3) At each regular eligibility redetermination, the county shall ask a recipient whether the recipient is eligible for and takes advantage of the EITC. If the recipient may be eligible and does not participate, the county shall give the recipient the federal or state EITC form and encourage and assist the recipient to take advantage of it.
(Amended by Stats. 2016, Ch. 190, Sec. 1. (AB 2877) Effective January 1, 2017.)
Last modified: October 25, 2018