Overview
The Young Child Tax Credit (YCTC) provides up to $1,117 per eligible tax return for tax year 2023. YCTC may provide you with cash back or reduce any tax you owe. California families qualify with earned income of $30,931 or less. You also must have a qualifying child under 6 years old at the end of the tax year and qualify for CalEITC – with one exception.
For tax year 2022 forward, no earned income is required and you may have a net loss of as much as $33,497. However, you must otherwise meet the CalEITC and YCTC requirements. Note that taxpayers without at least $1 of earned income would not qualify for CalEITC.
Prior tax years
YCTC is also available for tax years 2019, 2020, and 2021. Eligible taxpayers would need earned income of $1 to $30,000. Those with zero earned income or less would not qualify for YCTC.
Earned income
Earned income is wages, salaries, tips, and other employee compensation that is subject to California withholding, or net income from self-employment.
Net loss
A net loss is generated when taxpayers’ losses exceed their income during the tax year. This includes all current tax year losses – not just the portion of losses that can be utilized to reduce taxable income. Those with net losses could include gig workers and other self-employed individuals, as well as those with investment, rental, or other losses.
An example: A taxpayer’s only capital transaction during the tax year is selling stock in a tech company for a $50,000 loss. The taxpayer might only be able to utilize $3,000 to take against the taxpayer’s taxable income. In calculating the total net loss for purposes of YCTC’s net loss limitation, the taxpayer would include the entire $50,000 loss, not only the $3,000 that could be utilized on a tax return.
For tax year 2023, you may qualify for YCTC with total earned income of zero dollars or less provided all the following apply:
- Your total wages, salaries, tips, and other employee compensation (whether subject to California withholding or not), if any, do not exceed $33,497.
- Your total net loss does not exceed $33,497.
- You otherwise meet the CalEITC and YCTC requirements.
Check if you qualify
Visit our CalEITC homepage to learn more about this credit, related credits you may qualify for, and to use our EITC calculator to estimate your credit.
How to claim
Filing your state tax return is required to claim this credit.
You must claim YCTC on the 2023 FTB 3514 form, California Earned Income Tax Credit, or if you e-file follow your software’s instructions.
You may claim YCTC for tax year 2019 forward by filing or amending your state income tax return. However, for tax years prior to 2022 you will only be eligible for YCTC if you meet all CalEITC requirements, including having at least $1 of earned income in the tax year.
Download, complete, and include with your California tax return:
Prior tax year credit forms:
