A number of tax benefits for Puerto Rico and the other U.S. territories have been added to the Puerto Rico earthquakes assistance bill that the U.S. House of Representatives is expected to pass next week.
Leading the list is extending the portion of the Child Tax Credit that makes payments to workers beyond the extent of their income tax liability to employees in Puerto Rico with one child or two children. Currently only workers in Puerto Rico with three or more children are covered. Workers with any number of children are eligible in the States.
The bill would also grant the governments of the territories $3 for Earned Income Tax Credit benefits for every $1 that the territorial government gives workers from its own resources.
The two provisions would pump $900 million to $1.2 billion a year into Puerto Rico’s economy.
Another provision would increase the tax credit limitation for the New Markets tax credit program by $500 million for this year and next year for investments in low-income areas of Puerto Rico — most of the territory.
The amount of tax credits for low-income housing built in Puerto Rico would be raised by $50 million and the calculation of income made through construction would be liberalized.
The bill would also grant Puerto Rico the 25 cents of the Federal tax on rum distilled in the territory or most rum distilled in foreign countries that the Federal government retains and the $3 that the Federal government would retain after 2021. The tax is $13.50 per proof gallon (10 one-fifth bottles). The territory is receiving $13.25 now and is scheduled to receive $10.50 after 2021.
The money goes into the territorial treasury but the insular government gives up to 44% of it to producers to compete with a practice initiated by the U.S. Virgin Islands.
Employers in earthquake disaster zones that continue to pay workers would get a subsidy towards the workers’ salaries.
The bill would also appropriate $4.67 billion in disaster aid funding for Puerto Rico.
The House Rules Committee set Monday at 10 am as the deadline for amendments to the bill.