The California Franchise Tax Board (FTB) has announced the next phase of its targeted outreach campaign, sending “nudge letters” to Californians who appear eligible for the California Earned Income Tax Credit (CalEITC) and related refundable credits—but who have not yet claimed them.
This effort, beginning mid-July 2025, is designed to close the gap between credit eligibility and actual participation—particularly among part-time workers, gig economy earners, and non-filers.
The letters will notify taxpayers that they may qualify for:
Recipients will be instructed to either:
The FTB has stated that eligibility indicators are based on prior-year tax return data or reported income from state agencies.
This is more than just outreach it's a compliance and planning opportunity.
Here’s how:
Clients who failed to file or filed incorrectly may be entitled to thousands of dollars in refundable credits. Prior-year returns (e.g., 2022, 2023) may be amended to claim missed benefits.
Tax professionals should identify and reach out to clients who:
Because the CalEITC mirrors elements of the federal EITC, filing strategies for one often affect eligibility for the other. This creates coordination opportunities between federal and state credit optimization.
Actual values vary based on filing status, dependents, and income.
California’s continued investment in direct outreach underscores a broader trend in tax administration: behavioral nudging + refundable credits = higher equity and participation.
For CPAs, this is a chance to deliver immediate value by:
See how Bizora can help!