This research will create the first-ever estimate of how many enrollees in the state’s food stamp program (CalFresh) do not receive the California Earned Income Tax Credit (CalEITC).
Finding data on who is eligible but not filing tax returns has been challenging for state agencies. The Internal Revenue Service (IRS) estimates that approximately 1 million eligible households in California did not claim the federal EITC in 2017. To date, there is no statewide estimate of how many CalEITC-eligible families do not receive the credit or the dollar amount of credits unclaimed — known as the CalEITC Take-up Gap.
No individual agency in California has all the information needed to identify the population of CalEITC-eligible non-filers and to estimate take-up of the CalEITC. While the California Franchise Tax Board has access to earned income information for non-filers, it does not know how non-filers will group themselves into tax units a key factor in determining CalEITC eligibility. The California Department of Social Services, which serves millions of low-income Californians through programs such as CalFresh and CalWORKs, collects information on family composition and earned income for potentially eligible families. To date, however, the FTB has not been able to access this data for the non-filing population.
As part of CPL’s recent research on EITC outreach efforts in California, we linked FTB tax return records with CalFresh (California’s Supplemental Nutrition Assistance Program, or SNAP) enrollment records. We will use this linked dataset to calculate the CalEITC take-up gap among households enrolled in CalFresh statewide.
We will explore three sources of non-participation among the CalFresh population:
1) tax filers who claim the federal EITC but not the state EITC,
2) tax filers who appear eligible for the state and/or federal EITC but do not claim either, and
3) CalFresh households who appear eligible for either EITC but do not file a return.
This linked dataset will allow us to investigate the take-up gap by race, income, and geography.
Matt Unrath (Principal Investigator), John Iselin, Taylor Mackay, Aparna Ramesh