Almost all parents in the states receive a Child Tax Credit: a payment (previously $2,000 and going up to $3,000-$3,600 for tax year 2021) for each child in the family. Working Americans receive this credit even if they don’t earn enough to pay any income taxes.

Puerto Rico residents have only been eligible for this credit if they’ve had three qualifying children. For tax year 2021, however, that has changed. The increased Child Tax Credit will be available for all qualifying children in households earning up to $150,000. The credit is $3,000 for children up to age six and $3,600 for kids ages 6 to 17.

You have to file federal income tax

To get the credit, parents must file federal income taxes. Residents of Puerto Rico don’t have to pay federal income tax on money earned in Puerto Rico, and generally aren’t required to file federal income taxes at all. However, the only way to claim the credit is to file form 1040 using Schedule 8812.

Residents of Puerto Rico will be eligible for the Child Tax Credit whether they earned any money in 2021 or not. They will be eligible whether they paid Social Security taxes or not. But they must file a federal income tax return to claim the credit.

How to file federal income tax

It is possible, and usually free, to use a service like efile.com to calculate income tax. The federal government will not accept electronic filing from Puerto Rico, though, so you will need to print out the completed form and mail it in.

Most people will file a form 1040, though there are also special forms for self-employed individuals in Puerto Rico, such as 1040PR.  Filing a 1040 will not cause you to owe taxes. It is the only way to claim the Child Tax Credit.

The was never a good reason to exclude Puerto Rico from the Child Tax Credit. The new ruling to increase eligibility is a step toward equality for Puerto Rico.

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