In this photo from Monday, September 10, 2018, Idalis Fernandez walks to his FEMA-furnished hotel room with his son Adrian, 2, at the Baymont Inn in Kissimmee, Florida. The vouchers that paid for hotel rooms for Puerto Rican evacuees end on Friday. , leaving many to find roofs above their heads.
Jean Raoux | PA
The improved child tax credit has, in just a few months, reduced child poverty, reduced hunger rates and given millions of families a boost to save and spend most.
However, residents of Puerto Rico, who are US citizens, have not seen any of these benefits.
That’s because they don’t qualify for the monthly advance payments, which run into hundreds of dollars a month for families with children.
There are many programs for which residents of Puerto Rico do not receive the same level of federal benefits due to the island’s status as a U.S. territory, according to Laura Esquivel, vice president of federal policy and advocacy. for the Hispanic Federation.
This includes the Child Tax Credit, the Earned Income Tax Credit, and programs such as Medicaid and the Supplemental Nutritional Assistance Program, or SNAP.
“All of these facts and statistics about the number of children who have already been lifted out of poverty because their families are receiving this advance payment do not apply in Puerto Rico,” Esquivel said.
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The new child tax credit
The US bailout earlier this year expanded the existing child tax credit, adding monthly advance payments and increasing the benefit to $ 3,000 from $ 2,000 for children ages 6 to 17 with a $ 600 bonus for children under 6 for the 2021 tax year.
The first half of the credit is paid out in monthly direct deposits until December, and the second half will come when families file their 2021 tax returns next year. So far, the IRS and the Treasury Department have sent three monthly payments to millions of American families.
Most families in the United States who have children are eligible to receive credit money. The full benefit goes to married couples with up to $ 150,000 in adjusted gross income and to single-parent families with up to $ 112,500.
Even though residents of Puerto Rico were excluded from monthly advance payments, the US bailout still made improvements to the child tax credit for residents of Puerto Rico.
Before the legislation was passed, those living in Puerto Rico could only apply for the credit if they had three or more children. Now they will get the credit even if they have a child. Full credit repayment also applies in Puerto Rico, meaning residents can claim the benefit even if they have no taxable income.
Qualifying families will get the full credit in one lump sum at tax time by completing a Form 1040.
Payments would help Puerto Rican children now
Although residents of Puerto Rico eventually get the credit, it is not helping them now amid their own recovery from the coronavirus pandemic and the ensuing economic crisis. The island is also recovering from Hurricane Maria, which struck in 2017.
Almost 57% of Puerto Rican children lived in poverty in 2019, according to the Instituto del Desarrollo de la Juventud, a nonprofit focused on young people on the island. The rate of children in poverty jumped to 65% in 2020 due to the coronavirus pandemic. For comparison, the official rate of child poverty in the United States rose to around 16% in 2020, from around 14% in 2019, according to the US Census Bureau.
“[Advance payments] could meet needs immediately, as opposed to something that can just wait until tax season to get a lump sum payment, ”said Carmen Isaura Rodríguez, director of advocacy for Instituto del Desarrollo de la Juventud.
Credit and advance monthly payments would be particularly useful for children living with single mothers. Of the poor in Puerto Rico, about 75% live in a female-headed household, for which the median income is around $ 8,800 per year.
“There is definitely a need, and we could see a big reduction in the child poverty rate in Puerto Rico,” Rodríguez said.
Part of the reason Puerto Ricans do not receive the monthly payments is that the United States has left it up to the local government to implement the program, as many residents do not report federal income taxes to them. the IRS, Esquivel explained.
But there is a no-filer portal for US residents who don’t file tax returns to register for payments. And, residents of other U.S. territories, including American Samoa, Guam, the U.S. Virgin Islands, and the Northern Marina Islands, are eligible for advance payments.