On Tuesday, Thomas Rivera Schatz, the President of the Puerto Rico Senate, sent a letter to Speaker of the House Nancy Pelosi (D-CA), Senate Minority Leader Chuck Schumer (D-NY), House Minority Leader Kevin McCarthy (R-CA), and Senate Majority Leader Mitch McConnell (R-KY) asking them to extend the Child Tax Credit to Puerto Rico on an equivalent basis with the States.
What is the Child Tax Credit?
The Child Tax Credit gives up to $2,000 to working families for each child who is 17 or under at the end of the year. The $2,000 offsets the family’s tax bill dollar for dollar. $1,400 of the credit is refundable, meaning that families who owe less than $1,400 in taxes receive the full $1,400 regardless. The CTC thus provides additional cash for the poorest working families.
“The child tax credit helps working families throughout the United States offset the coat of raising children,” Rivera Schatz wrote, “yet it is surprisingly unavailable for U.S. citizens in Puerto Rico until they have their third child.”
Puerto Rico has had one of the lowest birth rates in the United States for some years, and is currently at a record low for births. This means that fewer working families in Puerto Rico are able to benefit from the Child Tax Credit. In the States, parents receive the Child Tax Credit for their first child and all subsequent children.
“The CTC is a vital measure to improve family economic security, reduce child poverty, and contribute to overall economic growth,” Rivera Schatz argued in his letter. “That is why the bipartisan, bicameral Congressional Task Force on Economic Growth in Puerto Rico urged federal policy makers to make changes authorizing otherwise eligible families in Puerto Rico with one child or two children to claim the additional tax credit. We believe time is past due to enact these changes.”
Like many of the recommendations of the Congressional Task Force on Economic Growth in Puerto Rico, extension of the CTC to Puerto Rico would be automatic if Puerto Rico became a State. However, Rivera Schatz proposed that the credit simply be extended to Puerto Rico as though it were a State.
Working parents could file for U.S. federal income taxes, which they may not be required to do, and claim the credit. Many working parents in the States file income tax returns showing a tax obligation of $0, or of less than $1,400, and receive a return payment from the IRS. Residents of Puerto Rico could do the same. Rivera Schatz suggests that this plan would “involve the least amount of bureaucratic red tape, providing relief more efficiently to families who need it.
Copies of the letter were also sent to Richard Neal (D-MA), Kevin Brady (R-T), Charles Grassley (R-IA), Ron Wyden (D-OR), Marco Rubio (R-FL), Bob Menendez (D-NJ), Nydia Velazquez (D-NY), and Jenniffer Gonzalez-Colon (R-PR).