Gov. Pedro Pierluisi signed into law a measure that makes the extension of the application of the Earned Income Tax Credit (EITC) in Puerto Rico viable.
Pierluisi filed a bill with the legislature to increase the EITC in Puerto Rico immediately after the federal government extended the funds to the island as part of the American Rescue Act (ARPA).
"More than 500,000 families in Puerto Rico will benefit from this incentive, which will have the effect of providing relief to the working class. I reiterate my gratitude to President Joe Biden's administration and Congress for extending this program in Puerto Rico," the governor said on Sunday.
He explained that "roughly $612 million annually in additional funds for the program for the next 10 years will help us do justice to our island's labor force. With this aid, we are able to equate the state benefit with the federal one for American citizens living in Puerto Rico and this will have a multiplier effect on our economy."
He added that "this tax credit is a proven program that encourages work and encourages our people to enter the workforce and be adequately compensated."
Meanwhile, Puerto Rico Treasury Secretary Francisco Parés Alicea expressed satisfaction with the final piece.
"We affirm our commitment to the governor and to all taxpayers to distribute these millions with agility to the more than 500,000 families that will be able to claim them from the next tax cycle in the Income Tax Return. Our work team is extremely pleased with the final project," Parés stated.
The secretary added that the local Treasury Department, known as Hacienda, has already sent the draft distribution plan to the U.S. Internal Revenue Service (IRS) for approval, as established by federal law.
Likewise, he explained that any individual who is a resident of Puerto Rico and is 19 years of age or older for the year that they fill out the Income Tax Return, and who generates earned gross income, may request the Credit for Work on the return.
Parés explained that this credit will be based on income level and dependent. For example, a single taxpayer with three children and an income level of $21,000 and up to $40,000 would have a maximum credit of $6,500 per year.
The governor and Resident Commissioner Jenniffer González took steps in the White House and Congress for Puerto Rico to be included in the ARPA and to expand and extend the Work Credit program in Puerto Rico, as well as the Child Tax Credit (CTC).
In addition to this Work Credit, during the next tax cycle all custodians of minors may request the CTC. This did not happen in the past for island residents, as only those with three or more dependents could apply for the credit.
In the case of the Dependent Child Credit, next year custodians of children under six years of age will be able to receive $3,600 per child, while for children between 6 and 17 years of age they will receive $3,000. In the following years, the benefit returns to $2,000 dollars for minors up to 16 years of age.