Tax Credits and Deductions

Families throughout California may also be eligible for tax credits and deductions when filing your taxes. (A tax credit reduces the amount of income tax you have to pay while a tax deduction reduces the amount of your income that is subject to tax). When filing your taxes at a free tax assistance location, please make sure to address some of the following tax credits and deductions you may be eligible for. 

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable tax credit for low to moderate income working individuals and couples, especially those with children. 

The federal EITC provides a credit for low and moderate income filers who had earned income – wages – against to offset their federal tax liability, and in many cases provides a significant refund. The federal EITC is available for filers with income up to $53,267 for couples with three or more children, and the maximum credit can be as high as $6200.

The New California Earned Income Tax Credit (Cal EITC) 

In addition to the federal Earned Income Tax Credit, a new state Earned Income Tax Credit is now available for families in California. Signed into law in 2015, California’s new EITC is available for households with adjusted gross incomes of less than $6,717 if there are no qualifying children, less than $10,087  if there is one qualifying child, or less than $14,161 if there are two or more qualifying children.

To estimate the amount you may be eligible to receive in federal and state EITC, visit this calculator offered by the California Budget & Policy Center.

Nonrefundable Renter’s Credit

If you pay rent and have a personal income tax liability, you may be eligible for a Nonrefundable Renter’s Credit in California. 

Families with children and/or their dependents

You could get up to $1,000 in taxes credits and qualify for money to help cover the costs of childcare—which could mean money in your pocket—even if you don’t owe any taxes. Learn more about the Child Tax Credit and Child and Dependent Care Credit.

Students

Take advantage of tax credits that could help you pay tuition bills and stay focused on what matters: your schoolwork. Find out if you’re eligible for college education tax deductions and credits, like a student loan interest deduction.

Individuals Saving for Retirement

Did you know that you could reduce the federal income tax you pay by saving your money? Learn more about the Retirement Savings Contribution Credit.

Teachers

Have you spent your own money on books or school supplies for your students? If so, you can deduct those expenses and save money. Find out more about Tax Deductions for Teachers.

Homeowners

If you are a homeowner or have you recently made improvements to your property, you could save hundreds or even thousands of dollars when filing your taxes.

Business owners and the Self-Employed

Every penny counts when you’re running your own small business! Keep more of your hard-earned money and learn more about Tax Breaks for Business Owners and Self-Employed.

Victims of national disasters

Have you been a victim of a hurricane, flood, fire or other natural disaster? Get answers to some common tax questions and learn about potential tax relief available to you. Find out about Tax Deductions for Victims of Disasters.

Members of the Armed Forces

Did you know that you don’t have to include Veterans Administration disability benefits in your gross income when filing your taxes? Find answers to common questions about special tax benefits and rules for members of the military