SACRAMENTO- New research finds California will miss out on more than a billion dollars in economic activity and thousands of jobs that could have been generated by the federal refundable Earned Income Tax Credit (EITC). This is because an estimated 800,000 eligible Californians will neglect to claim over $1.2 billion in EITC dollars this tax season, according to the new report Left on the Table, published through a collaboration between the New America Foundation and economists at California State University at Fresno.

"We've always known how important these refunds are to California families," said Anne Stuhldreher, a senior research fellow at the New America Foundation. "This report is the first to show how important they are to our state's economy."

"By encouraging people to find out if they're eligible for these refunds, we can give struggling families a financial boost and stimulate the economy at the same time," she said.

The EITC is widely recognized as the federal government's most effective antipoverty program, lifting millions of low-income families and children out of poverty every year while incentivizing work and stimulating local economies. As part of the American Recovery and Reinvestment Act, the income thresholds and maximum refunds have been increased for tax years 2009 and 2010.

"These are tough times for families across our great state who are struggling and stretching every dollar to make ends meet," said California Governor Arnold Schwarzenegger. "This new report tells us that hundreds of thousands of hard working Californians are missing out on $1 billion in tax refunds through the Federal Earned Income Tax Credit. These dollars belong in our local and state economy and not in Washington."

Eligible Californians are not the only ones who lose when refunds go unclaimed, the report finds. Local businesses and counties also lose out on potential increased revenue and taxes that come from recipients spending their refund.

"We found that the EITC refunds, when spent in California, translate directly and indirectly into economic growth for small businesses that lead to job creation and tax revenue for the state," said Antonio Avalos, report co-author and professor of economics at California State University at Fresno.

California already benefits greatly from EITC claims and the resulting economic activity. The EITC refunds likely to be claimed this tax season total $5 billion- more than the combined incomes of all the State's home health care workers and electricians in 2008 - but this amount could be even higher. The report's main findings include:

• Spending resulting from State residents' receipt of the federal EITC creates over $5 billion in business sales in the State, supports almost 30,000 jobs, and creates more than $1.2 billion in labor income;
• Approximately 800,000 State residents will fail to claim more than $1.2 billion in EITC refunds this tax season; and
• If these refunds are claimed, they will spur $1.2 billion in business sales, pay $311 million in wages, and add nearly 7,500 jobs to the State economy. $88 million dollars in taxes will eventually come back to state and local government  (and $1,400 to the average family claiming the credit).

Estimates of the tax credit's economic impact are given for all California counties and selected cities.

"Through Maria's WE Connect Campaign, we have been very focused on making everyone aware of the Earned Income Tax Credit and other ways to put money back into the pockets of hard-working Californians," said Governor Schwarzenegger.

To learn if they're eligible for the EITC, Californians can go to www.weconnect.net, an initiative of California First Lady Maria Shriver. In most California counties, people can also call 211 to learn about local free tax preparation services.

The New America Foundation has long worked toward helping people permanently exit poverty by advancing financial empowerment policies to make it easier for them to build savings and enter the financial mainstream.

The full report is available here: http://assetsca.newamerica.net/publications/policy/left_on_the_table

The report will be released today at a forum in Sacramento to discuss the EITC, its benefits for low-income workers and the State, and ways to encourage eligible Californians to claim the refund. The forum will be held at the CSAC Conference Room, 1020 11th Street, 2nd Floor, at 12:00 pm.

For media inquiries or to RSVP for the event, please contact Elizabeth Wu at (510) 295-9859 or wu@newamerica.net.