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Puerto Rico May Be Offered US Earned Income Tax Credit

by Mike Godfrey, Tax-News.com, Washington

28 October 2015


The US Treasury Department, the National Economic Council, and the Health and Human Services Department have outlined legislation to help Puerto Rico address its serious fiscal deficits, including providing access to an earned income tax credit (EITC) to speed the territory's economic recovery.

A statement released from the Administration said that while "Puerto Rico has proposed important reforms, such as increasing tax collection," Puerto Rico cannot solve its crisis alone. It is estimated that the USD28bn fiscal shortfall that has been projected over the next five years will only be reduced to USD14bn if Puerto Rico's proposed actions are fully implemented. "The remaining shortfall must be filled, in no small part through the restructuring of Puerto Rico's large and complex debt burden," it said.

The Administration said US Congress will need to take action to help restart economic growth in Puerto Rico following that debt restructuring. "This should include providing access to an EITC, which is already available to Americans living in the fifty states and the District of Columbia," it said. Adding: "An EITC would create incentives for work and increase participation in the formal economy. An expanded child tax credit could supplement this effort."

TAGS: compliance | tax | tax compliance | fiscal policy | tax credits | Puerto Rico | United States

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