California Earned Income Tax Credit: Eligibility and Companion Credits

If you worked in California in 2025 and earned $32,900 or less, you likely qualify for the California Earned Income Tax Credit, a refundable state credit worth up to $3,756 for families with three or more children. The credit is paid out even if you owe no state tax, and unlike the federal EITC, it’s open to filers using an Individual Taxpayer Identification Number.¹ Two companion credits, the Young Child Tax Credit and the Foster Youth Tax Credit, ride on the same eligibility and can add up to $1,189 each.

Who Qualifies

You need to meet all of the following:

You are at least 18 by the end of the tax year, or you have a qualifying child.
You have earned income from work in California: wages, salary, tips, or net self-employment earnings. Investment income alone does not count.
You, your spouse, and any qualifying children each have a valid Social Security Number or ITIN. ITIN filers have been eligible for tax years beginning on or after January 1, 2020.¹
You lived in California for more than half the tax year.

Married filing separately is trickier. You can still claim CalEITC, but only if you had a qualifying child who lived with you for more than half the year and you either lived apart from your spouse for the last six months of the year or were legally separated under a written agreement or court decree.² Filing separately while still living together doesn’t cut it.

How Much the Credit Is Worth in 2025

For tax year 2025, both your earned income and your adjusted gross income must be $32,900 or less, regardless of filing status or number of children.³ If either figure exceeds that, you don’t qualify. The credit phases in and then phases out as your income rises, so most filers receive less than the following maximums:

No qualifying children: up to $302
One qualifying child: up to $2,016
Two qualifying children: up to $3,339
Three or more qualifying children: up to $3,756

There is also a separate cap on investment income. For 2025, if you had more than $11,950 in interest, dividends, capital gains, or similar passive earnings, you’re disqualified even if your earned income falls well under the ceiling.

Qualifying Child Rules

You don’t need children to claim CalEITC, but having them raises the credit substantially. A child qualifies if they pass four tests:

Relationship: your biological child, stepchild, foster child, sibling, or a descendant of any of these (a grandchild or niece, for example).
Age: younger than you and either under 19 at the end of the tax year, or under 24 if a full-time student for at least five months of the year. There is no age limit if the child is permanently and totally disabled.⁴
Residency: lived with you in California more than half the year. Temporary absences like attending school count as time lived with you.
Joint return: the child did not file a joint return with a spouse, unless the return was filed solely to claim a refund.

If more than one person could claim the same child, IRS tie-breaker rules apply. A parent beats a non-parent. Between two parents not filing together, the one the child lived with longer wins; if that ties, the higher AGI wins. A non-parent can claim the child only if no eligible parent does, and only if the non-parent’s AGI is higher than any eligible parent’s.⁵

Self-Employment and Gig Work Count

CalEITC isn’t limited to W-2 workers. Rideshare driving, freelance work, online sales, or any other business generates earned income for CalEITC through your net self-employment earnings, calculated on Schedule C (or Schedule F for farming) and carried onto Form 3514’s Worksheet 3.⁶ “Net” means gross revenue minus allowable business expenses, and you cannot skip deductions to inflate your earned income for a larger credit.⁷

Medicaid waiver payments and In-Home Supportive Services (IHSS) payments get special treatment. You can choose whether to include or exclude them from earned income for CalEITC, and your choice can differ from the one you made on your federal return.⁶ Running the numbers both ways is worth the few minutes.

Two Companion Credits on the Same Form

Many eligible filers miss these entirely. Both piggyback on CalEITC and are claimed on the same Form 3514.

Young Child Tax Credit

The YCTC is worth up to $1,189 per qualifying child under age six for 2025. You must qualify for CalEITC to claim it, and the same $32,900 income ceiling applies.³ A family with two children under six hitting the maximum CalEITC and YCTC could receive up to $5,717 in state credits, before any federal credits. ITIN filers can claim the YCTC.¹

Foster Youth Tax Credit

The FYTC is worth up to $1,189 per qualifying taxpayer, doubling to $2,378 if both you and your spouse or registered domestic partner qualify.⁸ To qualify, you must:

Qualify for CalEITC
Be between 18 and 25 at the end of the tax year
Have been in foster care at age 13 or older, placed through the California foster care system⁹

The FTB verifies your foster care history through its own process.

How to Claim It

Claim all three credits on FTB Form 3514, which walks you through 11 steps and transfers the result to your main California return.¹⁰ Attach Form 3514 to Form 540, Form 540 2EZ, or Form 540NR if you’re a nonresident or part-year resident.¹¹ Enter names and identification numbers exactly as they appear on government documents. If you use tax software, follow its CalEITC prompts and it will attach the form for you.

CalFile, the Franchise Tax Board’s free e-filing system, lets you file directly with the state.¹² E-filed refunds generally arrive in about a month; paper returns take closer to four.¹³ Free in-person help is available through VITA (income under $69,000, disabilities, or limited English) and TCE (age 60 and older).¹⁴

If You Missed a Prior Year

Qualified in a past year but never claimed the credit? File an amended California return using Schedule X attached to an amended Form 540, along with Form 3514 for the year you’re amending.¹⁵ California generally allows four years from the original due date to claim a refund. If you never filed for that year at all, you’ll need to file the original return, not an amendment. Credit amounts have climbed over the years, so going back can be worth the paperwork, especially in years you had qualifying children.

Effect on Public Benefits

Receiving CalEITC will not disqualify you from CalWORKs, Medi-Cal, or CalFresh. The refund is exempt as income and excluded from resource counts for 12 calendar months starting the month you receive it. You have a full year to spend or save the money without it affecting eligibility.

Supplemental Security Income works differently. The federal 12-month resource exclusion covers federal tax refunds and does not extend to state refunds.¹⁶ If you receive SSI, plan to spend or convert your CalEITC refund promptly so it doesn’t push you over the resource limit.

1
Franchise Tax Board. Individual Taxpayer Identification Number (ITIN)
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Franchise Tax Board. CalEITC Qualification Expanded Credit Code 242 PTE Elect
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Franchise Tax Board. Eligibility and Credit Information
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Franchise Tax Board. Earned Income Tax Credit Calculator – Help with Qualifying Children
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Internal Revenue Service. Tie-Breaker Rules
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Franchise Tax Board. 2025 California Earned Income Tax Credit Booklet
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Internal Revenue Service. Earned Income, Self-Employment Income and Business Expenses
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California Department of Social Services. Foster Youth Tax Credit
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Franchise Tax Board. Foster Youth Tax Credit
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Franchise Tax Board. California Earned Income Tax Credit
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Franchise Tax Board. 2025 Form 3514 California Earned Income Tax Credit
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Franchise Tax Board. CalFile
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Franchise Tax Board. Timeframes
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Franchise Tax Board. Get Free Tax Help VITA and TCE Program
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Franchise Tax Board. 2025 Instructions for Schedule X California Explanation of Amended Return Changes
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Social Security Administration. Federal Tax Refunds and Advance Tax Credits for SSI Resources