Child Tax Credit for Puerto Rico

As an unincorporated territory of the United States, Puerto Rico has some of the rights and responsibilities that the 50 States have. For example, working people in Puerto Rico pay Social Security and payroll taxes just as residents of States do, but they do not get equal benefits. One of the differences between Puerto Rico and the States is that residents of States receive a Child Tax Credit of up to $2,000 for each child in the family. In Puerto Rico, only the third or subsequent child is eligible for this credit. The first two children are not.

Since the average woman in Puerto Rico has only one child, the practical result of this rule is that families in Puerto Rico do not benefit from the Child Tax Credit.

Cesar Conda, a former Chief of Staff to U.S. Senator Marco Rubio, has written in an opinion piece for the Orlando Sentinel that this should change. Pointing out that all the families that left Puerto Rico for Florida are now eligible for the Child Tax Credit since they live in a State, Conda writes, “The CTC is a true success story. It reduces child poverty, encourages work, and is uncontroversial.”

He points out that Sen. Marco Rubio has cosponsored legislation in the Senate to make the law apply equally in Puerto Rico. Resident Commissioner Jennifer Gonzalez-Colon introduced identical legislation in the House. Both bills have bipartisan support, but are still in committee.

Conda writes that there are other bills under consideration which would distribute tax credits to the Governor of Puerto Rico as a lump sum, perhaps delaying this funding. He believes that the tax credit should go directly to the families.

“Puerto Ricans, who pay federal payroll taxes as well as other federal taxes, deserve the same respect and dignity afforded to other U.S. citizens,” Conda writes. “And putting money directly into the pockets of Puerto Rican families will boost consumer spending on goods and services and help the island’s economy recover.”

The same proposal was made by the bipartisan Task Force on Economic Growth in Puerto Rico, and in the 2019 annual report of Puerto Rico’s Federal Oversight and Management Board (FOMB).

While equality for the U.S. citizens of Puerto Rico cannot be attained under the Island’s current territorial status, applying the Child Tax Credit equally to residents of Puerto Rico would help to reduce child poverty on the Island and support economic growth there.

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