Senator Scott Cosponsors Child Tax Credit Equity

on March 16, 2020

Senator Rick Scott of Florida has cosponsored S 698, a Senate bill known as the “Child Tax Credit Equity for Puerto Rico Act of 2019.” This bill would change the law to allow families in Puerto Rico to have the same access to the Child Tax Credit in the 50 states.

Tax credits

A tax credit is special. Deductions reduce the amount of money you pay taxes on. If you earn less money, your tax bill gets smaller. Your tax bill is a percentage of your income after deductions, so each child gives you a deduction and your income is reduced. Since your income is lower for tax purposes, you end up paying less in taxes.

A tax credit is different. You receive a certain dollar amount as a discount on your taxes. If you live in a state and have children, for example, you can receive up to $2,000 for each child under 17. Regardless of your income (as long as it’s under $400,000 for a married couple), you will get $2,000 taken off the amount you owe.

Up to $1,400 of that is refundable. That means that, if like half of Americans you don’t have to pay any income taxes, you can get as much as $1,400 per child as a refund — a payment from the government to you.

The Child Tax Credit

The tax credit described above is the Child Tax Credit. Families living in states get up to $2,000 for each child, no matter how many children they have.

If you live in Puerto Rico, however, you get up to $2,000 for your third child. You get no tax credit for your first child or your second child. A family with three children in Ohio gets $6,000, even if they earn $140,000 per year. A family in Puerto Rico with three children receives a credit of $2,000.

Last year, Senator Bob Menendez introduced S 698, a bill which will make Puerto Rico equal to the states on this one issue. If the bill becomes a law, families in Puerto Rico will receive a Child Tax Credit for each child, including their firstborn.

This change has been suggested many times and is supported by many legislators and organizations. It would help reduce child poverty in Puerto Rico. It is not a special arrangement for Puerto Rico — it’s just a matter of fairness.