How to Claim the Child Tax Credit in Puerto Rico

Recent legislative changes have expanded the federal Child Tax Credit (CTC), allowing many families in Puerto Rico to access this benefit for the first time. The credit is designed to help with the costs of raising children and is available even to families who do not file a federal income tax return or owe federal income tax. This expansion provides direct financial support to eligible households across the island.

Eligibility Requirements for Puerto Rico Residents

To qualify for the Child Tax Credit, the person filing the tax return must be a bona fide resident of Puerto Rico. This means their main home, or “tax home,” must have been in Puerto Rico for more than half of the tax year.

Beyond the filer’s residency, each child claimed for the credit must meet four specific tests to be considered a “qualifying child.” The first is an age requirement: the child must have been under the age of 17 at the end of the tax year. For example, to claim the credit on a 2024 tax return, the child must not have turned 17 on or before December 31, 2024.

The relationship test requires the child to be the filer’s son, daughter, stepchild, or an eligible foster child. It also includes a filer’s brother, sister, half-brother, half-sister, stepbrother, or stepsister. Descendants of any of these individuals, such as a grandchild, niece, or nephew, also satisfy the requirement.

Additionally, the child must meet a residency test, which mandates that the child lived with the filer in Puerto Rico for more than half of the year. Temporary absences for reasons like school, vacation, or medical care are counted as time lived at home. The final requirement is the support test, which stipulates that the child cannot have provided more than half of their own financial support during the year.

Each qualifying child must have a valid Social Security Number (SSN) issued by the Social Security Administration before the due date of the tax return, including extensions. An Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN) is not sufficient for the child. The filer, however, can have either an SSN or an ITIN to claim the credit.

Calculating the Credit Amount

For the 2024 tax year, the Child Tax Credit provides a maximum of $2,000 for each qualifying child. The credit is fully refundable for residents of Puerto Rico, meaning a family can receive the amount as a refund even if they have no earned income or owe no federal income tax. For instance, an eligible family with two qualifying children could receive up to $4,000.

This refundability is made possible through the Additional Child Tax Credit (ACTC). For 2024, up to $1,700 per child is available as a refundable credit through the ACTC. This structure turns the credit into a direct payment rather than just a reduction of taxes owed.

The amount of the credit a family receives can be limited by their income. The credit begins to reduce for taxpayers with a Modified Adjusted Gross Income (MAGI) above certain thresholds. The reduction begins for single filers with a MAGI over $200,000 and for married couples filing a joint return with a MAGI over $400,000.

The phase-out reduces the total credit amount by $50 for every $1,000 (or fraction thereof) that the filer’s MAGI exceeds the applicable threshold. For example, a married couple filing jointly with one child and a MAGI of $410,500 would be $11,000 over their threshold. This would require them to reduce their credit by $550.

Information and Forms Needed to Claim the Credit

To claim the Child Tax Credit, you will need to gather several pieces of information. You will need the full names, exact dates of birth, and valid Social Security Numbers for yourself, your spouse if filing jointly, and each qualifying child.

You must also collect all documents related to your income for the year. This includes any Form W-2PR, which reports wages and tax withholding. If you are self-employed, you will need complete records of your income and expenses.

The primary forms used by bona fide residents of Puerto Rico to claim the CTC are Form 1040-SS, “U.S. Self-Employment Tax Return,” and Schedule 8812, “Credits for Qualifying Children and Other Dependents.” Form 1040-SS is used to claim the credit even if you do not have any self-employment income.

When completing the forms, you will use Schedule 8812 to determine the exact amount of your credit. You will enter the name, SSN, and relationship for each qualifying child, and the form guides you through the calculation. You then transfer this final credit amount to the designated line on Form 1040-SS.

How to File for the Credit from Puerto Rico

After completing the required forms, you can submit them to the IRS electronically or by mail. Electronic filing (e-filing) is a faster and more secure method available through authorized providers listed on the IRS website. If filing a paper return without a payment, mail it to the Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215.

By law, the IRS cannot issue refunds for tax returns that claim the Additional Child Tax Credit before mid-February. This delay applies regardless of whether you file on paper or electronically. Refunds are sent via direct deposit if you provided your bank account information on the tax form, or as a paper check mailed to the address on your return.

You can monitor the status of your refund using the “Where’s My Refund?” tool on the IRS.gov website or through the IRS2Go mobile app. To use the tool, you will need your Social Security Number or ITIN, your filing status, and the exact refund amount shown on your tax return.