A new bill in the House of Representatives would provide a federal supplement to the earned income tax credit program to millions of American citizens and residents in Puerto Rico, Guam and other U.S. territories.
New Jersey Rep. Bill Pascrell and Puerto Rico Resident Commissioner Jenniffer González-Colón introduced the legislation, and Guam Del. Michael San Nicolas is among the legislation's 11 co-sponsors.
H.R. 3307 would amend the Internal Revenue Code of 1986 to provide for EITC payments for U.S. territories. It is part of a package of bills scheduled for consideration Friday in the House Ways and Means Committee, according to Pascrell's office.
Currently, the governments of Guam, Puerto Rico and other territories pay for the federal program with local funds, which is incongruous with the practice stateside. The federal government pays EITC for Americans living in California, Ohio, New York and other states.
"The EITC helps low- and moderate-income working individuals, by providing substantial support through tax credits to help alleviate financial burdens while encouraging work at the same time," Colón stated. "Currently, the EITC is unavailable to Americans living in Puerto Rico and other territories, including members of the military, federal employees and those who pay federal taxes. Together with the infusion of funds and the greater engagement by a productive workforce would make a major contribution towards transforming the Island's economy out of relative stagnation towards a healthy and steady growth path."
EITC has been a growing liability for the government of Guam. In the last 15 years, the amount of EITC owed to local residents each tax year has nearly tripled – from $23.9 million for tax year 2005 to nearly $60 million in the last fiscal year.
According to Pascrell, the Joint Committee on Taxation estimates that H.R. 3307 would reduce poverty by putting an extra $6.8 billion into the pockets of working Americans in Puerto Rico and other U.S. territories over the next 10 years.
In addition to San Nicolas, the legislation is co-sponsored by Democratic Reps. Don Beyer of Virginia, Suzan DelBene of Washington, Bonnie Watson Coleman of New Jersey, Darren Soto of Florida, Barbara Lee of California, Nydia Velázquez of New York, Brian Higgins of New York, Danny K. Davis of Illinois and Alexandria Ocasio-Cortez of New York, and CNMI Del. Gregorio Sablan.
