Quick note: This is educational only. Eligibility and amounts change from year to year. We will confirm current rules when we prepare your return.
Contents
California credits to review
California Earned Income Tax Credit (CalEITC)
For low to moderate earned income from wages or self-employment. The credit amount generally increases with qualifying children and phases out at higher incomes. File a California return and complete the CalEITC worksheet when eligible.
Good to know
In recent years California has allowed certain ITIN filers to claim CalEITC if other requirements are met. Confirm current eligibility at filing time since rules can change.
Young Child Tax Credit (YCTC)
Additional refundable credit for families who qualify for CalEITC and have a child under age 6 at year end. It can significantly increase refunds for eligible households.
Foster Youth Tax Credit (FYTC)
Credit intended to support eligible current or former foster youth who also qualify for CalEITC. Refundability and age criteria apply. Review the current state instructions to confirm.
California Child and Dependent Care Expenses Credit
Based on a percentage of qualifying care expenses so you can work or look for work. Keep provider information, payment records, and details for the dependent who received care.
California Renter's Credit
For eligible renters who paid rent on a principal California residence for at least half of the year and meet income limits. You generally cannot claim it if you claimed a homeowner property tax exemption for that year.
Important federal credits
- Child Tax Credit (CTC): Per child credit with phaseouts at higher incomes. A portion can be refundable depending on current law.
- Child and Dependent Care Credit: For daycare, preschool, after-school programs, or summer day camp needed so you can work or look for work.
- American Opportunity Tax Credit (AOTC): For qualified undergraduate tuition and required fees. Partially refundable.
- Lifetime Learning Credit (LLC): For many post-secondary courses and programs, including part-time or graduate study.
- Saver's Credit: For eligible retirement contributions to accounts like an IRA or 401(k), subject to income limits.
- Premium Tax Credit: For health insurance purchased through the exchange. If you received advance payments, reconcile using Form 1095-A.
Documentation matters
Education credits rely on Form 1098-T and your school account statement. For Premium Tax Credit reconciliation, you need Form 1095-A. Keep childcare provider details on hand.
Coordination tips
- Credits can be refundable or nonrefundable. Refundable credits can increase your refund even if you do not owe tax.
- Education expenses cannot be double counted. If you use qualified tuition for AOTC, you cannot also use the same dollars for a 529 distribution exclusion.
- If you receive advance payments of the Premium Tax Credit, reconcile accurately to avoid unexpected balances due.
- For separated parents, review who claims the child since that can affect CTC, EITC, and care credits.
- California does not conform to every federal rule. State and federal results can differ even with the same facts.
What to gather
- W-2s and 1099s for wages and other income
- Social Security numbers or ITINs for everyone on the return
- Childcare provider name, address, and taxpayer ID, plus receipts
- School billing statements and Form 1098-T for education credits
- Form 1095-A for exchange health coverage
- Lease agreements or rent receipts if claiming the renter credit
Want help maximizing credits this year?
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Book a free consultationFAQ
Can ITIN filers qualify for CalEITC?
California has allowed certain ITIN filers to qualify in recent years if other requirements are met. Confirm the current rules for the tax year you are filing.
Do I need income to claim child and dependent care credits?
Yes, the care credits are tied to earned income. There are additional rules when one spouse is a full-time student or disabled.
Can I claim both AOTC and LLC in the same year?
Not for the same student. You can choose which credit fits better for each eligible student in your household that year.
Does California allow HSA deductions?
No. California does not allow a deduction for HSA contributions even though federal law does. This is a common federal vs. state difference.