Knowing what to do as a young adult can be challenging, particularly for foster youth who haven’t had a parent beside them each step of the way to teach them. Tax filing is one good example of a tedious, but necessary task of adulthood.
Thanks to John Burton Advocates for Youth (JBAY), more foster youth than ever are filing their taxes, getting a return and achieving financial stability. Since 2021, JBAY has worked to increase rates of tax filing, starting with the creation of the California Foster Youth Tax Credit, the nation’s first tax credit specifically for young adults who were in foster care.
On Tuesday, September 18th, JBAY released a report on the status of this effort and there is good news to share: a 17% increase in the number of people who claimed the Foster Youth Tax Credit, reaching a total of 5,587 young people in 2024. The total amount refunded to current and former foster youth through the Foster Youth Tax Credit and other state and federal tax credits increased 15% from $10,598,709 in 2023 to $12,235,954 in 2024.
For 23 year-old former foster youth Destiny, her $691 refund helped her pay down her credit card. She lives in Los Angeles and was assisted by The Community College Foundation, which is a subgrantee of JBAY. Twenty-year old Akira learned about the assistance provided by the project from her sister who works with foster youth, “It was straightforward, and for the first time doing my taxes was easy; usually, I lose money.” Akira’s $300 refund isn’t enough for a new car, but it was a nice supplement to her paycheck from Wingstop, “It went right to groceries.”
According to Housing and Economic Mobility Director Simone Tureck Lee, these are just a few of the ways that young people use the money that the Foster Youth Tax Credit provides. “The average income for a young person coming from foster care is low, just over $15,000. That means that even small amounts of money make a difference, helping them with utilities, transportation, groceries, and more.”
JBAY’s 2024 report found that young parents who filed their taxes received a larger refund, $5,265 on average because they can benefit from other state and federal tax credits. JBAY is working to ensure young parents in foster care know about the credit and in 2024, conducted special outreach with service providers that specialize in serving young parents.
The September 18th report and accompanying webinar highlighted this and other strategies that JBAY deployed to increase utilization of the Foster Youth Tax Credit, many of which worked while others did not. According to Housing and Economic Mobility Director Simone Tureck Lee, “We have learned a lot and we’re making good progress towards our goal of having 10,000 young adults claim the Foster Youth Tax Credit.”
Veronica Galvez led the effort at The Community College Foundation and sees first-hand the difference that the project is making, “Tax filing is important for the foster youth population because it not only provides a much needed one-time influx of cash to help uplift them out of poverty but it is also a great catalyst for our clients to learn more about their finances. It can inspire them to obtain their vital documents, think about building their credit, and take banking, budgeting and investments a little more seriously.”