Section 1 Short title
This Act may be cited as the “Earned Income Tax Credit Equity for Puerto Rico Act of 2023”.
Earned Income Tax Credit Equity for Puerto Rico Act of 2023
A BILL
To amend the Internal Revenue Code of 1986 to make residents of Puerto Rico eligible for the earned income tax credit.
Sec. 2 Puerto Rico residents eligible for earned income tax credit
In general— Section 32 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(n) Residents of Puerto Rico
“(1) In general—In the case of residents of Puerto Rico—
“(A) the United States shall be treated as including Puerto Rico for purposes of subsections (c)(1)(A)(ii)(I) and (c)(3)(C),
“(B) subsection (c)(1)(D) shall not apply to nonresident alien individuals who are residents of Puerto Rico, and
“(C) adjusted gross income and gross income shall be computed without regard to section 933 for purposes of subsections (a)(2)(B) and (c)(2)(A)(i).
“(2) Limitation—The credit allowed under this section by reason of this subsection for any taxable year shall not exceed the amount, determined under regulations or other guidance promulgated by the Secretary, that a similarly situated taxpayer would receive if residing in a State.”
Child tax credit not reduced— Subclause (II) of section 24(d)(1)(B)(ii) of such Code is amended by inserting before the period “(determined without regard to section 32(n) in the case of residents of Puerto Rico)”.
Termination of annual reimbursement for Puerto Rico earned income tax credit—
In general— Section 7530(a)(1) of such Code is amended by striking “calendar year 2021 and each calendar year thereafter” and inserting “calendar years 2021, 2022, and 2023”.
Conforming amendment— Section 7530(a)(1)(B) of such Code is amended by striking “in the case of calendar years 2021 through 2025, the lesser of” and inserting “the lesser of”.
Effective date— The amendment made shall apply to taxable years beginning after December 31, 2023.