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Bill

AB 398

Personal income tax: Earned Income Tax Credit.

2025-2026 Regular Session Introduced by Patrick Ahrens

AB 398 modifies California's Earned Income Tax Credit for low-income workers, currently under budgetary review in the Appropriations Committee.

In committee: Held under submission.
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Bill Summary · AB 398

Legislative bill overview

AB 398 proposes modifications to California's Earned Income Tax Credit (EITC), a refundable tax credit designed to reduce taxes for low-to-moderate income working individuals and families. The bill has advanced through initial committee stages but currently sits in the Appropriations Committee's suspense file, where bills with significant fiscal impacts are reviewed before proceeding.

Why is this important

The EITC is one of the largest anti-poverty programs in the United States, directly affecting hundreds of thousands of California workers. Changes to this credit can meaningfully impact household income for working families earning between roughly $15,000-$60,000 annually, potentially affecting childcare decisions, housing stability, and economic mobility.

Potential points of contention

  • Fiscal cost: The suspense file placement suggests concerns about the bill's budgetary impact during a period of California's fiscal constraints
  • Eligibility or benefit level changes: Any modification to who qualifies or how much they receive could create winners and losers among low-income workers
  • Implementation complexity: Changes to tax credits require coordination with state revenue systems and may create administrative challenges for both filers and the Franchise Tax Board

Compiled from official sources — confirm details with the bill’s official record.

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