For tax year 2021, Puerto Rico families will have access to the Child Tax Credit (CTC) on an equal footing with the States. First Lady Dr. Jill Biden, Education Secretary Miguel Cardona, House Chairwoman Nydia Velazquez, Deputy Secretary of Treasury Wally Adeyemo, and American Rescue Plan Coordinator Gene Sperling held a virtual event with UnidosUS, the Hispanic Federation, the Institute of Youth Development/Instituto del Desarrollo de la Juventud (IDJ), Espacios Abiertos, and United Way of Puerto Rico to make sure families don’t miss out on this credit.
Until this year, families in Puerto Rico became eligible for the tax credit only when they had three or more children. That meant that only ten percent of Puerto Rico families were eligible. In the States, families became eligible for the tax credit as soon as they had one child. Now that this ruling has been extended to Puerto Rico, 97% of families with children will be able to benefit from the tax credit.
The American Rescue Plan (ARP) permanently extended this credit to Puerto Rico. It also increased the credit to $3,600 for children up to age 6 and $3,000 for kids 6-17. Finally, the ARP made it possible for families with no earnings to receive the credit.
Families must file a federal tax return
To receive the credit, families must file a federal tax return because the CTC is a federal program. In general, Puerto Rico residents do not pay taxes on wages earned in Puerto Rico, and are not required to file a federal income tax return.
Both the territorial government and the federal government are making efforts to make sure families in Puerto Rico know that they must file a federal return in order to receive the credit.
Monday night’s online event was part of this effort.
“Don’t wait. It will mean thousands of dollars to help pay for child care, school clothes and household bills. It will help keep food on the table,” the First Lady told viewers.
“The CTC can make a critical and lasting difference for the families of Puerto Rico,” Secretary Cardona said. “Students cannot learn if they come to school hungry. A family cannot take their children to school without gasoline.”
The event was the culmination of a drive to help households in Puerto Rico file successfully by the deadline of April 18, 2022. The White House is working with nonprofits, community leaders, and elected officials to get the word out.
More than 35 local events have been undertaken, and more than 240 local officials have been trained to help families file the necessary forms.
The Center on Budget and Policy Priorities estimates that the Child Tax Credit will lift 4.1 million American children out of poverty. Since 58% of the children on the Island are living in poverty, this credit will make a significant difference to the lives and futures of the people of Puerto Rico.
Additional information is available on the government website.
Updated on April 14: See related blogpost by American Rescue Plan Coordinator and Senior Advisor to the President Gene Sperling here.