WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) today led a group of colleagues in introducing a bill that would help put more money in the pockets of hardworking low-and moderate-income American families living in Puerto Rico. Similar legislation was included in the Heroes Act (H.R. 6800) that passed the House of Representatives last month. The bill enhances Puerto Rico’s local Earned Income Tax Credit (EITC) by providing a 3:1 federal match, in which the federal government provides three dollars for every dollar provided by the island.
The bill is sponsored by Democratic Leader Chuck Schumer (D-N.Y.) and Senators Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and Kirsten Gillibrand (D-N.Y.)
“It is our responsibility to help our fellow American citizens living in Puerto Rico who are recovering from a string of natural disasters and a downward spiraling economy worsened by the effects of the COVID-19 pandemic,” said Sen. Menendez. “By expanding the Earned Income Tax Credit we can help support working families in Puerto Rico and boost labor force participation on an island where nearly half of its residents live under the federal poverty line.”
“Puerto Ricans have been resilient through unimaginable adversity, from destructive natural disasters, to the global COVID pandemic, a political crisis, and now preparing for an upcoming hurricane season” stated Democratic Leader Chuck Schumer. “Our fellow American citizens on the island are counting on Congress’ assistance in these uncertain times, and federal support of the Earned Income Tax Credit is the first immediate step we can take to help families in most need. Democrats will continue fighting tooth and nail so that Puerto Rico has equal access to the resources they need without bureaucratic delays.”
“Puerto Rico has been severely impacted by multiple natural disasters, a struggling economy, and lasting effects of the COVID-19 pandemic. Our fellow Americans whose communities have been continuously devastated over the past years need sustainable methods of relief now more than ever. Through an expansion of the Earned Income Tax Credits, we can offer real support to those families and residents of the island so desperately in need,” said Sen. Blumenthal.
“We must do everything we can to support our fellow U.S. citizens in Puerto Rico, who have been suffering from an economic crisis, were ravaged by natural disasters, and are now combatting this deadly pandemic,” said Sen. Warren. “The Earned Income Tax Credit has a proven track record of raising earnings and lifting families out of poverty, and I’ll keep fighting to pass this bill and get the residents of Puerto Rico this much-needed economic boost.”
“For far too long, the U.S. government has failed the people of Puerto Rico by denying full access to the earned income tax credit, one of the most effective anti-poverty and economic development programs provided by the federal government. After dealing with hurricanes, more than a decade of austerity and multiple earthquakes, Puerto Ricans have a right to a responsive government and full federal support to put an end this crisis," said Sen. Sanders. “I stand with the people of Puerto Rico to demand the full resources of the United States for as long as necessary to ensure that every community gets the food, water, housing, electricity, and medical care they so desperately need.”
Currently, Puerto Rico and U.S. territories are not allowed to participate in the federal EITC, depriving American citizens residing in those territories tax relief they otherwise would be able to access had they lived on the U.S. mainland.
Specifically, the bill instructs the U.S. Department of Treasury to make payments to all U.S. territories of 75 percent of the relative cost of each territory’s EITC. The territories must provide Treasury with annual reports on the estimate of costs and a statement of costs with respect to the preceding year.
In Puerto Rico’s case, it has a local EITC that costs the island about $204 million a year. The bill would provide Puerto Rico up to $612 million for the first year to match their local $204 million EITC under the at 3:1 ratio
This week, Sen. Menendez, along with by Sen. Marco Rubio (R-Fla.), also urged Senate Leadership to include the bipartisan Child Tax Credit Equity for Puerto Rico Act (S. 698) in the next stimulus package.
New Jersey has the third-largest population of Puerto Ricans on the U.S. mainland.
The full text of the bill can be found here.
October 27, 2020