Brookings has suggested that taxpayers who receive a refund under the Earned Income Tax Credit might be better off with multiple refund dates. EITC gives credits primarily for working parents with children at home, and many families get an additional refund because of EITC, even if their income is too low for them to have paid taxes. EITC recipients may get a tax refund that is equal to two or three months of their wages.
In a study of EITC recipients in Boston, researchers found that families used the funds to pay off debt, but also treated it as a “windfall” which allowed them to make purchases they otherwise could not afford, such as a meal out or a special present for a child. Not surprisingly, families enjoyed the “windfall” aspect of the refund.
Previous studies have shown that the EITC funds are also used to make large expenditures that poor families would find very hard to save for: a car or college tuition, for example. These investments in employability are probably a big part of the benefit for the nation as a whole in the EITC, which is widely considered one of the most valuable anti-poverty efforts we have.
However, Brookings author Alan Berube wonders whether distributing the refund out in quarterly payments might be a better solution. With smaller but more frequent payments, families could avoid using debt to help with the gap between their wages and their cost of living. “It’s time,” he says, “to try making the EITC more than an annual boom in a bust-filled financial cycle for low-income families.”
EITC is not available to people living in Puerto Rico. Even though nearly half of Americans living on the mainland do not pay federal taxes, the fact that Puerto Ricans do not pay federal taxes on income earned in Puerto Rico has been used as an argument to keep the EITC credit from applying in Puerto Rico. The Government Accountability Office concluded in a 1996 analysis that some 59% of households in Puerto Rico would be eligible if the EITC were extended to Puerto Rico.
Hopping in near future will be eligible.
Gov.Padilla (D-PR/PDP) Must be laughing out loud. The socialist anti privatization marxist spends his time visiting Venezuela and DOMINICAN republic seeking to introduce “Latin American style” reforms in Puerto Rico rather than emulate the free market and private entrepreneurship in the states.
He also told Moodys,FITCH, and Standar&Poor “I CARE LESS!!!” (me vale) “If you want to tell PR what to do, Become a “Wall street party” RUN FOR OFFICE or vote for the statehood party that licks your a….”
He directed the GOVERNMENT NOT to repay a $225 million loan it owed to Doral Bank. Going to court after court to deny repayment. When a local fed court ordered the gov to repay DORAL, GOV. padilla IGNORED the court order and filed appeal literally at the last minute. All was a stall tactic betting the Bank would be closed by the FDIC before they paid, saving the $225 million.
Gov Padilla also ripped up contracts from prior GOP gov Fortuño, Attempted a parallel nacional bankrupcy code using “sovereign immunity” of Commonwealth to not default on most of $73 billion owed to US families (including Puerto Ricans) who invested in their 401k.
This governor is a scumbag and he knows it.
They are destroying PR so it cant be either a state nor nation thus forcing the continuation by default of “commonwealth”.
Luis, did you hear about the scheme by Garcia Padilla and Justice Secretary Caesar Miranda to get the US Supreme Court to rule that the ELA is an incorporated territory? They are going to appeal the state supreme court ruling on double jeopardy (see this website’s March 23rd article) to the US Supreme Court. The USSC will likely rule that Puerto Rico became an incorporated territory in 1917 with the granting of US citizenship (and thus overturning Balzac v PR) … preserving the status quo indefinitely.
I’m still waiting for a substantial income tax refund from Puerto Rico for the past tax year. Apparently they’ve decided to keep it. The press only reports on the debt to bond holders. How extensive is is the default on income tax refunds? Can’t get any information.