What documentation do I need to claim the California Earned Income Tax Credit (CalEITC)?

To claim the California Earned Income Tax Credit (CalEITC), you do not need to submit additional documents with your tax return, but you must have proof of your income and eligibility available if the Franchise Tax Board (FTB) requests it. The claim is made by correctly filing your California income tax return. Here is how to prepare and claim the credit: Step 1: Gather Proof of Identity Collect valid Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs) for yourself, your spouse (if filing jointly), and any qualifying children you intend to claim on your tax return. Step 2: Collect All Income Statements Gather all documents showing your earned income for the tax year. This includes W-2 forms from employers and any 1099 forms (like 1099-NEC or 1099-K) if you were an independent contractor or self-employed. If self-employed, you must also have records of your business income and expenses. Step 3: Collect Proof for Qualifying Children If you are claiming a qualifying child, keep records that prove your relationship (birth certificate), the child’s residency with you for more than half the year (school or medical records with your address), and their age. Do not mail these with your return unless the FTB specifically asks for them. Step 4: File Your California Tax Return Complete the California Resident Income Tax Return (Form 540). You must file your state return by the annual deadline, usually April 15, to claim the credit. Step 5: Complete Form FTB 3514 You must complete and attach the California Earned Income Tax Credit form (FTB 3514) to your Form 540. Most tax preparation software will do this automatically based on the information you enter. Important Details and Nuances: You must have earned income to be eligible for the CalEITC. This credit is refundable, which means you may receive a payment even if you owe no tax. Keep all supporting documents for at least four years in case the FTB audits your return and requests proof of your eligibility. Warnings and Limitations: The FTB actively verifies CalEITC claims. If you cannot provide supporting documents when requested, your claim will be denied, and you may have to repay the credit with interest and penalties. Incorrectly claiming the credit can also result in being banned from claiming it for several years. This is general information and does not constitute legal advice. For complex situations, such as those involving self-employment or questions about qualifying children, consult with a qualified California tax professional or attorney.