Governor Pedro Pierluisi announced that he will file an administrative measure to extend the provisions of the credit for work available in the Federal Internal Revenue Code to Puerto Ricans.
“This makes it possible to make state benefits equal to federal benefits for US citizens living on the island,” the statement said.
Pierluisi pointed out that the measure to increase the Puerto Rico government’s work credit program with federal funds will encourage work and help the working class.
The Governor reiterated his appreciation to President Biden’s government and Congress for approving the U.S. bailout that expanded the Earned Income Tax Credit (EITC) program with approximately $ 612 million in additional funding for the program for the next 10 year.
“The full extension of credit for work to Puerto Rico will have a multiplier effect on our island. The adoption of this measure will provide our taxpayers with an economic stimulus focused entirely on promoting employment.” For this government, it is of the utmost importance to expand the resources we have available and that will benefit our citizens, ”said the governor, adding that the measure establishes that the Puerto Rico Department of the Treasury will do everything. undertake what is necessary to promote the effective implementation of this legislation for the tax cycle corresponding to the year 2021.
The piece of legislation explains that the work credit in Puerto Rico currently includes a 10-cent tax credit for every dollar of income a family generates, up to $ 15,000, for a married family with two children. However, as household income continues to rise, credit falls until it eventually returns to zero, which happens when income reaches $ 34,750. Under the existing calculation, the maximum work credit benefit in Puerto Rico is $ 2,000 per year, so this measure is designed to equate the benefit awarded in the state work credit to the federal credit.
As a condition of receiving approved federal funds, the government of Puerto Rico must make annual payments of more than $ 800 million to EITC recipients. However, for fiscal year 2019, the claimed credits were estimated at $ 115 million with a total of 258,000 files, which is well below the established base amount. For this reason, it is imperative for the government of Puerto Rico to pass legislation aimed at changing the local EITC with a view to expanding work incentives.