Starting next year, thousands of workers in Puerto Rico will receive the work credit benefit, after the governor Pedro Pierluisi made into law the measure that makes the extension to the country of the application of the Earned Income Tax Credit (EITC, for its acronym in English).
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, for its acronym in English).
“More than 500,000 families on the island will be able to benefit from this incentive, which will have the effect of providing relief to the working class. I reiterate my appreciation to the administration of President Biden and to Congress for expanding this program in Puerto Rico. Some $ 612 million annually in additional funding for the program for the next 10 years will help us do justice to our island’s workforce. With this help, we were able to equate the state benefit with the federal benefit for American citizens living in Puerto Rico and this will have a multiplier effect on our economy, ”the governor said in a press release.
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The chief executive added that “this tax credit is a proven program that encourages work and encourages our people to enter the workforce and be adequately compensated.”
For his part, the secretary of the Department of Finance, Francisco Parés Alicea, was satisfied with the final piece and honored to be part of this historic moment in which justice will be done to the Puerto Rican working class.
“We affirm our commitment with the governor and with all taxpayers to distribute this $ 800 million with agility, each year, to the more than 500,000 families that will be able to claim it from the next tax cycle in the Income Tax Return. Our work team is extremely pleased with the final project and the sustained dialogue to achieve this law, which allows us to incentivize active workers while encouraging other citizens to join the workforce, ”said Parés Alicea.
The secretary added that the Department of the Treasury has already sent the draft distribution plan to the Internal Revenue Service (IRSfor approval, as required 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 he fills out the Income Tax Return, and who generates earned gross income, may request the Credit for Work on the return. He explained that this credit will be based on income level and dependent. For example, a single taxpayer, with three children, with an income level of $ 21,000 to $ 40,000, would have a maximum credit of $ 6,500 per year.
Governor Pierluisi and the Resident Commissioner Jenniffer González took steps in the White House and Congress for Puerto Rico to be included in the American Rescue Plan (ARPA) and to expand and extend the Credit for Work program in Puerto Rico, as well as the Credit for Dependent Child (CTC, for its acronym in English). In addition to this Credit for Work, 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 6 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 subsequent years, the benefit returns to $ 2,000 for minors up to 16 years of age.
“This benefit of the Work Credit, as well as the Dependent Child Credit and the increase in the minimum wage, represent great permanent steps that we are taking in Puerto Rico in favor of the working class. Now, not only will they be guaranteed a higher minimum wage, but they will also reward work and help families with children to ensure a better quality of life and to help reduce child poverty, “said the governor, who added that “the engine of the economy are the thousands of Puerto Ricans who take to the streets every day to work and contribute to their island, and I am sure that all these benefits come to provide relief to their burden.”