The California Department of Social Services (CDSS) has issued guidance for various programs about the treatment of Better for Families Tax Refund, and the Young Child and Foster Youth Tax Credits.
AB 192 established the Better for Families Tax Refund program, called the middle-class tax refund. SB 201 expanded the definition of a qualified taxpayer to include taxpayers with no earned income and those in foster care between the ages of 18 and 25.
The CalWORKs program treats the Better for Families Tax Refund the same as the federal earned income tax credit. It does not count as income and does not count as a resource for 12 months. Refunds from the Young Child and Adopted Youth Tax Credit are treated the same as federal earned income refunds and do not count as income, and do not count as a resource for 12 months.
CalFresh and the California Food Assistance Program do not count either the of Better for Families Tax Refund, or the Young Child and Foster Youth Credits as income. CalFresh and the California Food Assistance Program counts them as a resource beginning in the month received. However, most households are in California are not subject to a resource limit because they have either Categorical Eligibility or Modified Categorical Eligibility.
The Better for Families Tax Refund does not count as income for Medi-Cal Modified Adjusted Gross Income (MAGI) applicants or recipients. It will be considered property for non-MAGI Medi-Cal recipients. Counties are reminded that the property limit for non-MAGI Medi-Cal is now $130,000 for one person and $65,000 for each additional person.
The Department of Health Services (DHCS) is seeking a federal waiver to exempt the Young Child and Foster Youth Tax Credit from being treated as income.
The CalWORKs program rules apply to RCA, ECA, and TCVAP programs, and they must follow the CalWORKs rule above both the Better for Families Tax Refund, and the Young Child and Foster Youth Tax Credits.
The Cash Assistance Program for Immigrants (CAPI) treats both the Better for Families Tax Refunds and the Young Child and Foster Youth Tax Credit in the same way as federal earned income refunds, and federal tax refunds are excluded from counting as income and from the resource limit. (ACL 22-91, October 28, 2022.)