Sacramento, CA – Assembly Bill 91, authored by Assemblywoman Autumn R. Burke, Chair of the Assembly Committee on Revenue and Taxation, was signed into law on Monday, July 1, 2019. Officially called the Loophole Closure and Small Business and Working Families Tax Relief Act of 2019, AB 91 will provide additional support for our state's neediest families by dramatically expanding the California Earned Income Tax Credit (CalEITC).
AB 91 also improves the state’s long-term financial stability by closing a series of loopholes providing unjustified tax breaks. Specifically, this bill aligns state law with federal laws to close executive compensation loopholes, limit non-corporate business losses above $250,000, and eliminate net operating loss carrybacks. The changes encompassed within AB 91 will bring in roughly $1.6 billion in revenue in fiscal year 2019-20.
Among other things, this revenue will be used to expand access to the CalEITC by making families earning up to $30,000 a year eligible for the credit. AB 91 also establishes a new Young Child Tax Credit of up to $1,000 for families with children under 6.
“Even though California is the fifth largest economy in the world,” said Assemblywoman Burke, “we have the highest rates of poverty in the nation. One in five Californian families lives in poverty, with 500,000 of those living in deep poverty on less than $13,000 per year. These families often have to choose between keeping the lights on and putting food on the table. They lay awake in bed at night worried about paying the rent.”
“By eliminating unjustified tax breaks, AB 91 will allow us to support needy families by expanding the CalEITC, which provides immediate relief to households already struggling and helps prevent families on the brink from falling deeper into poverty,” stated the Assemblywoman. “These changes also simplify tax compliance for small businesses, as they will not have to contend with differing sets of state and federal tax law.”