US Treasury Announces USD600m In Tax Breaks For Puerto Ricans

by Leroy Baker, Tax-News.com, New York

27 July 2009

The US Department of the Treasury has announced the disbursement to Puerto Rico of USD600m in stimulus act payments, expected to benefit more than 1 million Puerto Rican workers.

The payments have been mandated by the American Recovery and Reinvestment Act, signed by President Obama last February, designed to help jump start the US economy.

"Disbursing payments to working families in Puerto Rico is part of Recovery Act efforts to get the economy back on track," said Deputy Treasury Secretary Neal Wolin.

"Throughout the United States, the Recovery Act is revitalizing communities by funding the construction of schools and affordable housing units, providing tax breaks to help parents send their children to college, and giving more than 95% of workers a tax break,” he added.

Available for tax years 2009 and 2010, the Making Work Pay tax credit is 6.2% of a taxpayer's earned income, subject to certain limitations.

The maximum credit for a married couple filing a joint return is USD800, while other taxpayers may receive credits of up to USD400. More than one million workers in Puerto Rico are expected to qualify for the tax credit this year.

Already this month, the Treasury Department has announced the disbursement of about USD3.5bn in Recovery Act funds through payments in lieu of tax credits. These included USD486m to spur the development of affordable housing units in 11 states and the Virgin Islands, and USD3bn to support about 5,000 renewable energy projects.

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