President Biden is committed to creating an economy that works for every American. Part of that agenda is to ensure that families in Puerto Rico are treated fairly in our tax system. Historically, the prior Child Tax Credit (CTC) only applied to families in Puerto Rico with three or more qualifying children, and therefore only 10% of families with children were eligible.
That changed when President Biden signed the American Rescue Plan (ARP). It not only provided the largest Child Tax Credit nationwide to the most ever families, it also made sure that, for the first time, families and children in Puerto Rico fully benefited – permanently fixing the credit to give Puerto Rico families equal access. This tax filing season, 97% of Puerto Rico families with children are now eligible for the expanded CTC. The law also permanently changed the structure of the CTC so that every child in Puerto Rico will get the credit on the same basis as all other American children. This will mean that parents in Puerto Rico will have, as President Biden says, a “little more breathing room” in meeting the costs of raising a family and that there will be fewer children in Puerto Rico living in poverty.
The ARP also meant a historic expansion of the federal government’s commitment to expand the Earned Income Tax Credit (EITC) in Puerto Rico. Together, the expanded CTC and EITC could provide an estimated $1 billion annually in critical benefits to hundreds of thousands of low- and moderate-income working people and families in Puerto Rico.
Today, as part of a final push to encourage families in Puerto Rico to file their taxes and receive both the CTC and EITC, 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 are holding a special 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. The Biden Administration and these leading non-profits are urging families to file their taxes by April 18th to take advantage of this critical aid.
The American Rescue Plan made historic, permanent changes to the Child Tax Credit for Puerto Rico families – making the credit available to 97% of Puerto Rico families this year, compared to 10% before the ARP
- Previously, only Puerto Rico families with three or more qualifying children or more qualified for any Child Tax Credit benefit.
- This meant that before the American Rescue Plan, only about 10% of Puerto Rico families qualified for any Child Tax Credit.
- The ARP permanently changed that policy to extend the CTC to Puerto Rico families with fewer than three qualifying children who were previously excluded. As a result of the ARP, 97% of Puerto Rico families with children are eligible for the 2021 Child Tax Credit.
- For 2021, the ARP increased the Child Tax Credit to $3,600 per child under 6 and $3,000 per child 6-17 – and ensured that lower income families could access the full credit.
- In addition, the ARP provided the first-ever federal support for Puerto Rico’s local Earned Income Tax Credit – allowing Puerto Rico to more than triple EITC benefits and extend the EITC to more workers.
Together, the ARP’s expansions of the CTC and EITC are estimated to provide over $1 billion in tax relief per year going forward. They stand to benefit hundreds of thousands of Puerto Rico families – with the families of over 500,000 children eligible for the 2021 expanded CTC.
Today’s event builds on substantial White House-Treasury Department efforts to ensure access to the 2021 Child Tax Credit in Puerto Rico:
- The White House and Treasury Department in collaboration with UnidosUS created a Weekly CTC/EITC Puerto Rico Working Group, with the Youth Development Institute (IDJ), Espacios Abiertos, Hispanic Federation, and others, to increase awareness and take up rates among newly eligible families in Puerto Rico for the CTC and Local EITC. This group is comprised of representatives of the Puerto Rico government, Hacienda (the local tax authority), Treasury, IRS, and local stakeholders — including community-based organizations and other advocates in Puerto Rico – who work to remove barriers for the implementation of tax credit policies. Collaboration across these groups has already led to the execution or launch of over 35 local community events, navigator trainings and capacity building engagements for local elected officials and municipal staff. More than 240 municipal and state agencies employees were trained to scale and implement integrated outreach strategies and provide free tax preparation services for low-to-middle income communities.
- The White House and Treasury Department collaborated closely with the Governor of Puerto Rico, Mayors, foundations and NGOs on the island to increase awareness and CTC sign-ups in Puerto Rico. The White House ARP Implementation Coordinator, White House Intergovernmental Affairs and Treasury teams met twice at the White House with the Governor of Puerto Rico on CTC outreach strategy and had several meetings with top Puerto Rican mayors. The White House ARP Implementation Team also organized several meetings with foundations on the importance of investing in CTC outreach in Puerto Rico.
- The Administration launched a stand-alone section of ChildTaxCredit.gov for Puerto Rico families and outreach partners. Childtaxcredit.gov/es/puerto-rico/ highlights the unique and unprecedented access for families with children to benefit from the enhanced CTC and provides information on how to claim the credit in plain language, Spanish, and a mobile friendly format.
- The Treasury Department and the White House worked to build capacity for Volunteer Income Tax Assistance (VITA) Centers and Facilitated Self-Assistance (FSA) Sites, including through navigator training and volunteer recruitment scale-up for tax prep assistance in low income communities. Currently there are 43 tax assistance sites, including VITA and FSA in the island.
- The Administration amplified the island-wide public campaign by the Alliance for Economic Security in Puerto Rico, and garnering support from state/local government. The Alliance, composed by the Hispanic Federation, Instituto del Desarrollo de la Juventud (IDJ) and Espacios Abiertos coalesced to launch ReclamaTuDineroPR.com to further promote awareness of these tax benefits. In addition, the Administration has helped amplify these efforts and match trained IRS volunteers with Mayors and municipalities to host “Fill-a-thons” (“Llenatones” in Spanish) – to ensure all families with children learn about the credit and can receive tax filing assistance through a local community event.
- Treasury provided training for mayors in Puerto Rico on how to leverage ARP State & Fiscal Recovery Funds (SLFRF) to do CTC and EITC outreach and tax filing assistance outreach in collaboration with the White House, the Government of Puerto Rico, the Association of Mayors, and the Federation of Mayors of Puerto Rico to maximize critical State and Local ARP funds for local governments in Puerto Rico.