The Child Tax Credit is a refundable tax credit — that is, people who file for this credit can receive it whether or not they have paid any income tax — from the federal government. It was established in 1997, when it was a generally non-refundable credit of $400 per child. It has gradually increased to the current refundable credit of up to $3,600 per child.
Until last year, families in Puerto Rico were eligible for this credit only if they had three or more children. The average household in Puerto Rico contains 2.74 children and the average woman has fewer than one child. In practice, very few households in Puerto Rico were eligible for the child tax credit.
In every state, families with just one child were eligible for the child tax credit.
Last year, families in Puerto Rico became eligible for the child tax credit under the same terms as families who lived in states.
Under the recently passed American Rescue Plan Act (ARPA) of 2021, Puerto Rican families with one or more qualifying children are eligible to receive up to $3,000 per child under the age of 18, and up to $3,600 per child under the age of 6.
Good news for families
The inclusion of Puerto Rican families in the CTC has been a long-standing issue. Puerto Rico is a U.S. territory with a population of over 3 million people, many of whom live in poverty. The exclusion of Puerto Rican families from the CTC has contributed to high levels of child poverty on the island, which has been exacerbated by the economic downturn in recent years as well as the natural disasters that have plagued the Island.
It is estimated that approximately 1.1 million children in Puerto Rico will benefit from the expanded CTC, which could help to reduce child poverty on the island. It is an acknowledgement of the struggles that Puerto Rican families have faced in recent years, and a recognition of their right to the same benefits as families on the mainland.
There are still challenges that must be addressed to ensure that the CTC is effectively reaching families in Puerto Rico. One challenge is the lack of access to banking services on the island, which could make it difficult for families to receive the payments of the CTC. Another challenge is the need for education and outreach efforts to inform families about the new law and how to claim the credit.
Most residents of Puerto Rico are not required to file a federal income tax return. However, the child tax credit cannot be claimed without filing this return. Many heads of households have never done this before and may not be sure how to go about it. Find all the information you need at Reclama tu dinero.
There will also be offices providing free assistance. See the locations on a map. Saturday hours will be held on March 11, April 8, and May 13, 2023.