{"identifier":"/us/usc/t26/s7530","title":26,"num":"\u00a7\u202f7530.","heading":"Application of earned income tax credit to possessions of the United States","text":"\u00a7\u202f7530.\nApplication of earned income tax credit to possessions of the United States\n(a)\nPuerto Rico\n(1)\nIn general\nWith respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to Puerto Rico equal to\u2014\n(A) the specified matching amount for such calendar year, plus\n(B) in the case of calendar years 2021 through 2025, the lesser of\u2014\n(i) the expenditures made by Puerto Rico during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to the earned income tax credit, or\n(ii) $1,000,000.\n(2)\nRequirement to reform earned income tax credit\nThe Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless Puerto Rico has in effect an earned income tax credit for taxable years beginning in or with such calendar year which (relative to the earned income tax credit which was in effect for taxable years beginning in or with calendar year 2019) increases the percentage of earned income which is allowed as a credit for each group of individuals with respect to which such percentage is separately stated or determined in a manner designed to substantially increase workforce participation.\n(3)\nSpecified matching amount\nFor purposes of this subsection\u2014\n(A)\nIn general\nThe term \u201cspecified matching amount\u201d means, with respect to any calendar year, the lesser of\u2014\n(i) the excess (if any) of\u2014\n(I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over\n(II) the base amount for such calendar year, or\n(ii) the product of 3, multiplied by the base amount for such calendar year.\n(B)\nBase amount\n(i)\nBase amount for 2021\nIn the case of calendar year 2021, the term \u201cbase amount\u201d means the greater of\u2014\n(I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or\n(II) $200,000,000.\n(ii)\nInflation adjustment\nIn the case of any calendar year after 2021, the term \u201cbase amount\u201d means the dollar amount determined under clause (i) increased by an amount equal to\u2014\n(I) such dollar amount, multiplied by\u2014\n(II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting \u201ccalendar year 2020\u201d for \u201ccalendar year 2016\u201d in subparagraph (A)(ii) thereof.\nAny amount determined under this clause shall be rounded to the nearest multiple of $1,000,000.\n(4)\nRules related to payments\n(A)\nTiming of payments\nThe Secretary shall make payments under paragraph (1) for any calendar year\u2014\n(i) after receipt of such information as the Secretary may require to determine such payments, and\n(ii) except as provided in clause (i), within a reasonable period of time before the due date for individual income tax returns (as determined under the laws of Puerto Rico) for taxable years which began on the first day of such calendar year.\n(B)\nInformation\nThe Secretary may require the reporting of such information as the Secretary may require to carry out this subsection.\n(C)\nDetermination of cost of earned income tax credit\nFor purposes of this subsection, the cost to Puerto Rico of the earned income tax credit shall be determined by the Secretary on the basis of the laws of Puerto Rico and shall include reductions in revenues received by Puerto Rico by reason of such credit and refunds attributable to such credit, but shall not include any administrative costs with respect to such credit.\n(b)\nPossessions with mirror code tax systems\n(1)\nIn general\nWith respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands equal to\u2014\n(A) the cost to such possession of the earned income tax credit for taxable years beginning in or with such calendar year, plus\n(B) in the case of calendar years 2021 through 2025, the lesser of\u2014\n(i) the expenditures made by such possession during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or\n(ii) $50,000.\n(2)\nApplication of certain rules\nRules similar to the rules of subparagraphs (A), (B), and (C) of subsection (a)(4) shall apply for purposes of this subsection.\n(c)\nAmerican Samoa\n(1)\nIn general\nWith respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to American Samoa equal to\u2014\n(A) the lesser of\u2014\n(i) the cost to American Samoa of the earned income tax credit for taxable years beginning in or with such calendar year, or\n(ii) $16,000,000, plus\n(B) in the case of calendar years 2021 through 2025, the lesser of\u2014\n(i) the expenditures made by American Samoa during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or\n(ii) $50,000.\n(2)\nRequirement to enact and maintain an earned income tax credit\nThe Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless American Samoa has in effect an earned income tax credit for taxable years beginning in or with such calendar year which allows a refundable tax credit to individuals on the basis of the taxpayer\u2019s earned income which is designed to substantially increase workforce participation.\n(3)\nInflation adjustment\nIn the case of any calendar year after 2021, the $16,000,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to\u2014\n(A) such dollar amount, multiplied by\u2014\n(B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting \u201ccalendar year 2020\u201d for \u201ccalendar year 2016\u201d in subparagraph (A)(ii) thereof.\nAny increase determined under this clause shall be rounded to the nearest multiple of $100,000.\n(4)\nApplication of certain rules\nRules similar to the rules of subparagraphs (A), (B), and (C) of subsection (a)(4) shall apply for purposes of this subsection.\n(d)\nTreatment of payments\nFor purposes of\nsection 1324 of title 31","url":"https://projectusc.org/usc/t26/s7530.html","content":[{"t":"sec","id":"/us/usc/t26/s7530","children":[{"t":"num","text":"\u00a7\u202f7530."},{"t":"heading","text":"Application of earned income tax credit to possessions of the United States"},{"t":"subsec","id":"/us/usc/t26/s7530/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Puerto Rico"},{"t":"para","id":"/us/usc/t26/s7530/a/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"With respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to Puerto Rico equal to\u2014"},{"t":"subpara","id":"/us/usc/t26/s7530/a/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the specified matching amount for such calendar year, plus","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/a/1/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" in the case of calendar years 2021 through 2025, the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/a/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the expenditures made by Puerto Rico during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to the earned income tax credit, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/a/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" $1,000,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/a/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Requirement to reform earned income tax credit"},{"t":"content","children":[{"t":"p","text":"The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless Puerto Rico has in effect an earned income tax credit for taxable years beginning in or with such calendar year which (relative to the earned income tax credit which was in effect for taxable years beginning in or with calendar year 2019) increases the percentage of earned income which is allowed as a credit for each group of individuals with respect to which such percentage is separately stated or determined in a manner designed to substantially increase workforce participation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/a/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Specified matching amount"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s7530/a/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cspecified matching amount\u201d means, with respect to any calendar year, the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/a/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" the excess (if any) of\u2014"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the base amount for such calendar year, or","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/a/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the product of 3, multiplied by the base amount for such calendar year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/a/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Base amount"},{"t":"clause","id":"/us/usc/t26/s7530/a/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Base amount for 2021"},{"t":"chapeau","text":"In the case of calendar year 2021, the term \u201cbase amount\u201d means the greater of\u2014"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" $200,000,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/a/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Inflation adjustment"},{"t":"chapeau","text":"In the case of any calendar year after 2021, the term \u201cbase amount\u201d means the dollar amount determined under clause (i) increased by an amount equal to\u2014"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" such dollar amount, multiplied by\u2014","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s7530/a/3/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting \u201ccalendar year 2020\u201d for \u201ccalendar year 2016\u201d in subparagraph (A)(ii) thereof.","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"\u2001Any amount determined under this clause shall be rounded to the nearest multiple of $1,000,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/a/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Rules related to payments"},{"t":"subpara","id":"/us/usc/t26/s7530/a/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Timing of payments"},{"t":"chapeau","text":"The Secretary shall make payments under paragraph (1) for any calendar year\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/a/4/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" after receipt of such information as the Secretary may require to determine such payments, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/a/4/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" except as provided in clause (i), within a reasonable period of time before the due date for individual income tax returns (as determined under the laws of Puerto Rico) for taxable years which began on the first day of such calendar year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/a/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Information"},{"t":"content","children":[{"t":"p","text":"The Secretary may require the reporting of such information as the Secretary may require to carry out this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/a/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Determination of cost of earned income tax credit"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the cost to Puerto Rico of the earned income tax credit shall be determined by the Secretary on the basis of the laws of Puerto Rico and shall include reductions in revenues received by Puerto Rico by reason of such credit and refunds attributable to such credit, but shall not include any administrative costs with respect to such credit.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s7530/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Possessions with mirror code tax systems"},{"t":"para","id":"/us/usc/t26/s7530/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"With respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands equal to\u2014"},{"t":"subpara","id":"/us/usc/t26/s7530/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the cost to such possession of the earned income tax credit for taxable years beginning in or with such calendar year, plus","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" in the case of calendar years 2021 through 2025, the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/b/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the expenditures made by such possession during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/b/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" $50,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Application of certain rules"},{"t":"content","children":[{"t":"p","text":"Rules similar to the rules of subparagraphs (A), (B), and (C) of subsection (a)(4) shall apply for purposes of this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s7530/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"American Samoa"},{"t":"para","id":"/us/usc/t26/s7530/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"With respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to American Samoa equal to\u2014"},{"t":"subpara","id":"/us/usc/t26/s7530/c/1/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/c/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the cost to American Samoa of the earned income tax credit for taxable years beginning in or with such calendar year, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/c/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" $16,000,000, plus","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/c/1/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" in the case of calendar years 2021 through 2025, the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s7530/c/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the expenditures made by American Samoa during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s7530/c/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" $50,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Requirement to enact and maintain an earned income tax credit"},{"t":"content","children":[{"t":"p","text":"The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless American Samoa has in effect an earned income tax credit for taxable years beginning in or with such calendar year which allows a refundable tax credit to individuals on the basis of the taxpayer\u2019s earned income which is designed to substantially increase workforce participation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/c/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Inflation adjustment"},{"t":"chapeau","text":"In the case of any calendar year after 2021, the $16,000,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to\u2014"},{"t":"subpara","id":"/us/usc/t26/s7530/c/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" such dollar amount, multiplied by\u2014","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s7530/c/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting \u201ccalendar year 2020\u201d for \u201ccalendar year 2016\u201d in subparagraph (A)(ii) thereof.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Any increase determined under this clause shall be rounded to the nearest multiple of $100,000.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s7530/c/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Application of certain rules"},{"t":"content","children":[{"t":"p","text":"Rules similar to the rules of subparagraphs (A), (B), and (C) of subsection (a)(4) shall apply for purposes of this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s7530/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Treatment of payments"},{"t":"content","children":[{"t":"p","text":"For purposes of ","children":[{"t":"ref","text":"section 1324 of title 31","href":"/us/usc/t31/s1324","tail":", United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"}]}]}