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Thursday, July 7, 2011

Pierluisi Introduces Legislation to Extend Federal Child Tax Credit to Puerto Rico

Working Families with One Child or Two Children

WASHINGTON, DC- In line with a recommendation made by the White House Task Force on Puerto Rico’s Status, Resident Commissioner Pedro Pierluisi today introduced legislation (H.R. 2454) to extend the refundable portion of the Child Tax Credit—often referred to as the Additional Child Tax Credit (ACTC)—to working families on the Island with one child or two children, so that they are treated equally with similarly-situated families in the 50 states.

Under current law, only working families in Puerto Rico with three or more children are eligible to receive the ACTC. According to information provided by the Internal Revenue Service, in tax year 2009 nearly 150,000 households in Puerto Rico received the credit, which resulted in over $310 million in federal funding for Island families.

If the bill filed by Pierluisi were to become law, many more families would receive the federal credit. According to Congress’s Joint Tax Committee, extension of the ACTC to Puerto Rico families with one child or two children would inject at least $180 million into the Island economy each year, or at least $900 over the next five years.

“Both Governor Fortuño and I have worked hard on this issue, urging the White House Task Force to recommend extension of the ACTC to all eligible working families in Puerto Rico, regardless of the number of children they have, as a means to reduce unemployment, alleviate poverty and spur economic growth on the Island,” said Pierluisi.

These efforts were successful; in its March 2011 report, the Task Force recommended full extension of the ACTC to Puerto Rico.

“Current law treats hard-working families in Puerto Rico unfairly compared to working families in the states, since stateside families are eligible for the credit regardless of the number of children they have. This disparate treatment is unprincipled: residents of Puerto Rico pay payroll taxes to the same extent as residents of the states, and millions of low-income residents of the states receive the ACTC even though they pay no federal income taxes,” the Resident Commissioner explained.

For tax years 2011 and 2012, the refundable portion of the Child Tax Credit—the ACTC—is equal to 15% of the family’s earnings in excess of $3,000 or $1,000 per child, whichever is less. If the value of the family’s credit is greater than its actual federal tax liability, the family is eligible to receive the difference as a refund.

Pierluisi thanked the bipartisan cosponsors of his bill, whose short title is the Child Tax Credit Equality for Puerto Rico Act of 2011. Cosponsors of the bill include Edolphus Towns (D-NY), who presented a similar measure in the previous Congress; Mario Díaz-Balart (R-FL) and José Serrano (D-NY), both of whom are members of the House Appropriations Committee; and Joe Crowley (D-NY) and Bill Pascrell (D-NJ), who are members of the House Committee on Ways and Means, which has jurisdiction over the bill.

Also cosponsoring the bill are Don Young (R-AK), a member of the House Committee on Natural Resources; Steve Rothman (D-NJ), Debbie Wasserman-Schultz (D-FL), and Alcee Hastings (D-FL).

This legislation is the fourth bill that Pierluisi has introduced to implement the recommendations of the White House Task Force. The previously-filed bills, respectively, seek to facilitate the process for Puerto Rico seniors to enroll in Medicare Part B and eliminate or reduce penalties for late enrollment; to direct the Department of Homeland Security and the Department of Justice to improve their efforts to recruit and retain federal law enforcement agents in Puerto Rico to combat drug-related violence; and to enable the government of Puerto Rico to provide the same level of preventive care and treatment services under Medicaid for breast cancer and cervical cancer that the 50 states can provide.