Residents of Puerto Rico now can receive the same Child Tax Credit benefit as residents of the 50 States and the District of Columbia.
The American Rescue Plan, signed by President Biden in March 2021, expands the Child Tax Credit to get more help to families in Puerto Rico. Thanks to the American Rescue Plan, bona fide residents of Puerto Rico now are eligible to receive the same Child Tax Credit benefit as residents of the 50 States and the District of Columbia.
Here are important changes to the Child Tax Credit that benefit residents of Puerto Rico.
- For 2021 and future years, bona fide residents of Puerto Rico need only one qualifying child to claim the Child Tax Credit. This change removed the previous requirement that a resident of Puerto Rico have at least three qualifying children to be eligible to claim the Child Tax Credit.
- The credit has been extended to qualifying children under age 18.
- For 2021, the credit amount has been increased, from up to $2,000 per qualifying child in 2020 to up to $3,600 for each qualifying child under age 6, and up to $3,000 for each qualifying child ages 6 to 17.
- You may claim this increased and fully refundable credit even if you didn’t have income or pay U.S. Social Security taxes in 2021.
Residents of Puerto Rico were not eligible to receive monthly advance payments of the Child Tax Credit in 2021. Instead, bona fide residents are able to receive the full amount of Child Tax Credit they are eligible for by filing a 2021 U.S. federal income tax return (Form 1040-PR, Form 1040-SS, or other 1040 series form filed with the IRS) during the 2022 tax filing season.
Historically, the vast majority of Puerto Rican families do not have to file a federal income tax return (federal returns), as long as they are bona fide residents of Puerto Rico during the entire tax year.
However, to request the 2021 Child Tax Credit, families will have to file the federal return.
A child’s age determines the amount
A child’s age helps determine the amount of Child Tax Credit that eligible parents or guardians can receive. For 2021, eligible parents or guardians can receive up to:
- $3,600 for each child who was under the age of 6 as of December 31, 2021.
- $3,000 for each child who was between the ages 6 and 17 as of December 31, 2021.
Parents income matters too
The overwhelming majority of eligible parents or guardians can receive Child Tax Credits, though families with higher incomes—such as married couples with incomes above $150,000—may not receive the full expanded credit.
You may be eligible to claim the Child Tax Credit if you are a bona fide resident of Puerto Rico and have a dependent minor (age 17 or younger) who lived in your household for more than half of the year.
- Your primary home can be anywhere you regularly live. Your primary home can be your house, apartment, mobile home, shelter, temporary housing, or other location and does not have to be the same physical location for the entire tax year.
- You do not need a permanent address to receive these payments. If you are temporarily away from your main home, for example due to illness, education, business, vacation, or military service, you are generally treated as if you lived in your main home.
Who is considered a “qualifying child”?
Most children under the age of 18 are [qualifying children] for the 2021 Child Tax Credit. This means that a parent or guardian is eligible to claim them for purposes of the Child Tax Credit.
For your children to qualify you for a Child Tax Credit, they must:
- Not have turned 18 before January 1, 2022*;
- Be your own child, adopted child, stepchild, or foster child. You can also claim a sibling, step-sibling, half-sibling, or a descendent of any of them (including a niece, nephew, or grandchild);
- Have lived with you for more than half of 2021;
- Not have paid more than half their own expenses; and
- Be a U.S. Citizen, U.S. national, or U.S. resident alien.
* The IRS determines your child’s age for purposes of the Child Tax Credit based on their age as of December 31, 2021.
The IRS has provided detailed information on other, less common factors that may impact whether a child is a qualifying child for the Child Tax Credit.
Children born or newly added to your family in 2021
A child born or added to your family (such as through adoption) in 2021 can be a qualifying child for the 2021 Child Tax Credit.
To claim this credit, a household must file a U.S. federal income tax return— different from the local tax return filing process through Hacienda (Puerto Rico tax authority).
As a bona fide resident of Puerto Rico, you may be eligible to claim the enhanced and fully refundable Child Tax Credit for your qualifying children on your:
What you will need in order to claim the credit
Prior to starting the filing process to claim the Child Tax Credit, there are a few key pieces of information you will need handy:
- A reliable mailing address
- Phone number or email address
- Children’s Social Security numbers - If your child has an Identity Protection PIN (IP PIN) have it handy. You can get an IP PIN here.
- Adults’ Social Security number or Individual Taxpayer Identification Number (ITIN
- Bank account information (if you want to receive your payment by direct deposit)
Additional guidance on free tax return preparation services is available, book an appointment to schedule a visit at an Hacienda VITA Center.
Free resources to help you file
If you are new to federal tax filing, or even if you’ve filed before but would like some help this year, there are places located across the island that can support you as you file your tax return. Many of these organizations offer both in-person and virtual support.
Additionally, many individuals file their tax returns with an accountant or tax preparer for a fee and you can search for an authorized IRS e-file Provider to find support near you. You can also search the list of local Tax Return Specialists provided by Hacienda.
Why non-filers should file a 2021 federal income tax return
Most Puerto Rico residents are not required to pay federal income taxes and may not have filed federal income tax returns before, but are eligible for the Child Tax Credit. Even if you do not normally file tax returns, whether federal income tax returns with the IRS or Puerto Rico tax returns with Hacienda (Puerto Rico’s tax filing authority), you may claim any Child Tax Credit benefits you are eligible for.
- Not Taxable: The Child Tax Credit payment is not taxable and does not count as income for IRS purposes.
- Does not affect other benefits: Receiving the Child Tax Credit will not impact anyone’s eligibility for or reduce the amount of other federal benefits.
By filing a Form 1040-PR or Form 1040-SS federal income tax return, families can claim the Child Tax Credit. However, families also can claim the Credit for Other Dependents, which provides a maximum credit amount of $500 for each dependent who meets certain conditions.
- For example, the Credit for Other Dependents can be claimed for:
- Dependents of any age, including those who are age 18 or older.
- Dependents who have Social Security numbers or individual taxpayer identification numbers.
- Dependent parents or other qualifying relatives supported by the taxpayer.
- Dependents living with the taxpayer who aren’t related to the taxpayer.
- If you are a bona fide resident of Puerto Rico, calculate the Credit for Other Dependents using the Additional Child Tax Credit Worksheet in the Instructions for Form 1040 (PR) or Form 1040-SS.
- Earned Income Tax Credit (EITC) A person who works and earns less than $44,000 is eligible. The maximum credit for work that a person can receive increased to $6,500 per year..
Getting the Child Tax Credit if you haven’t filed tax returns
Even if you do not normally file tax returns, you still can claim any Child Tax Credit benefits you are eligible for by filing a 2021 federal income tax return.
Annual income affects Child Tax Credit payments
The amount of your 2021 Child Tax Credit is based on your income, filing status, number of qualifying children, and the age of your qualifying children.
People who are eligible for the full credit amount
These people are eligible for the full 2021 Child Tax Credit for each qualifying child:
- Married couples filing a joint return with income of $150,000 or less.
- Families with a single parent (also called Head of Household) with income of $112,500 or less.
- Everyone else with income of $75,000 or less.
For the 2021 Child Tax Credit, the age of each qualifying child – whether they were older or younger than 6 years old at the end of 2021 – will determine the Child Tax Credit amount that their parents or guardians are eligible to receive.
People who are eligible for a partial amount of Child Tax Credit
These people qualify for a 2021 Child Tax Credit of at least $2,000 per qualifying child:
- Married couples filing a joint return with income of $400,000 or less.
- Families with a single parent (also called Head of Household) with income of $200,000 or less.
- Everyone else with income of $200,000 or less.
Families with even higher incomes may receive smaller amounts or no credit at all.
Does claiming the Child Tax Credit affect other federal benefits?
No, it does not affect your other federal benefits. Any refund you receive as a result of claiming the Child Tax Credit is not considered income for any family. Therefore, the amount you receive in other federal benefits such as unemployment insurance, Medicaid, PAN (formally food stamps), SSI, SSDI, TANF, WIC, Section 8, or Public Housing will not change.