Lifesaver. That is what an extra infusion of cash was for Olivia Penalber.
Olivia is a former foster youth, full-time student and a young parent, living in the Boyle Heights neighborhood of Los Angeles.
Her career advisor emailed her about a new program for current and former foster youth: the Foster Youth Tax Credit, which would add an extra $1,083 to her tax return.
Olivia followed through and, boy, did it work: she received a $12,000 refund!
“The money was a lifesaver. It’s helping me pay my bills, feed my kids and keep them in clean clothes. It’s helping me stay on track with my education and pursue my dream of working in women’s health someday.”
Olivia is one of over 4,500 statewide that received the Foster Youth Tax Credit, which John Burton Advocates for Youth (JBAY) worked to establish in 2022, together with former State Controller Betty Yee.
A key to the success of the inaugural year was county child welfare agencies informing foster youth about the Foster Youth Tax Credit. To encourage this, JBAY organized a “challenge” where counties worked to achieve the highest rate of receipt.
The inaugural Foster Youth Tax Credit challenge ended on August 1st, and three counties rose to the top: Stanislaus for the small county category, Kern for medium-sized county and Fresno for the large category. According to JBAY Executive Director Amy Lemley, the first year of the challenge was a success.
“Child welfare agencies have a lot on their plate, and tax filing can be intimidating. These counties made it a priority to help young people access the Foster Youth Tax Credit and lift youth out of poverty.”
According to Lemley, a total of 23 counties participated in the 2023 challenge, resulting in a statewide completion rate of 8.9%.
This year’s rate may be low, but it’s only the start according to Veronica Galvez, who led an impressive effort at The Community College Foundation by filing 206 tax returns that provided $546,661 directly to foster youth. This total included the Foster Youth Tax Credit and other available credits for college students and parents.
According to Galvez, “The one-time influx of cash made a huge difference in the lives of young people. Many used it to increase their housing stability and have reliable transportation to get to and from their job.”
JBAY is already gearing up for the 2024 tax season, with the goal of helping 10,000 foster youth receive the Foster Youth Tax Credit. This includes a September 13th webinar to share lessons learned from the 2023 tax season and a November 1st webinar to get people ready for 2024.
According to Lemley, this goal is ambitious, but possible.
“There is a tremendous community working together to make the Foster Youth Tax Credit a success, including public agencies, private nonprofit, philanthropy, and more. We know the difference that the Foster Youth Tax Credit makes for young people, and JBAY is committed to helping every eligible foster youth receive it.”