H.R. 1697: Child Tax Credit Relief for Puerto Rican Families Act

This bill, titled the Child Tax Credit Relief for Puerto Rican Families Act, aims to amend the Internal Revenue Code to provide better financial support for families in Puerto Rico through changes to the child tax credit. Here are the main components of the bill:

Key Provisions

• Equitable Treatment: The bill modifies section 24(d)(1) of the Internal Revenue Code by adding procedural provisions that ensure Puerto Rican residents have equitable treatment concerning the refundable portion of the child tax credit. This means that residents of Puerto Rico will be able to benefit from child tax credits in a manner similar to families in the mainland United States.
• Social Security Tax Definition: It changes how Social Security taxes are defined for calculating the refundable portion of the child tax credit. This includes modifications that allow twice the amount to be considered when determining the refundable credit, and it removes a prior limitation where only 50 percent of certain amounts could be used in the calculations.
• Effective Date: The changes made by this bill will apply to taxable years starting after December 31, 2024. This means that families will not see the benefits of these changes until they file their taxes for the year 2025 and beyond.

Objective

The main goal of this bill is to enhance financial support for Puerto Rican families, ensuring they are treated more equitably in terms of tax benefits related to child rearing. By providing more favorable conditions for claiming tax benefits, the bill seeks to alleviate some financial burdens faced by these families.

Impact of Changes

The adjustments to the child tax credit are intended to provide increased financial assistance to families with children, potentially leading to improved economic conditions for these households. The alterations in how Social Security taxes are calculated mean that families in Puerto Rico may receive larger refunds or credits, which could help with living expenses and child-related costs.

Relevant Companies

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