Sec. 20132. Application of child tax credit in possessions
595 words·~3 min read·
/bill/116/hr/6800/pcs/section-20132·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 24 of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended by adding at the end the following new subsection: The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning after 2019. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.
No credit shall be allowed under this section for any taxable year to any individual to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of the application of this section in such possession for such taxable year. For purposes of this paragraph, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
In the case of any bona fide resident of Puerto Rico (within the meaning of section 937(a))— the credit determined under this section shall be allowable to such resident, in the case of any taxable year beginning during 2020, the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subsection (d)(1)(A) (determined without regard to subsection (h)(4)), in the case of any taxable year beginning after December 31, 2020, and before January 1, 2026, the increase determined under the first sentence of subsection (d)(1) shall be the lesser of— the amount determined under subsection (d)(1)(A) (determined without regard to subsection (h)(4)), or the dollar amount in effect under subsection (h)(5), and in the case of any taxable year after December 31, 2025, the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subsection (d)(1)(A).
The Secretary shall pay to American Samoa amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of American Samoa by reason of the application of this section for taxable years beginning after 2019 if the provisions of this section had been in effect in American Samoa. Subparagraph
(A)shall not apply unless American Samoa has a plan, which has been approved by the Secretary, under which American Samoa will promptly distribute such payments to the residents of American Samoa in a manner which replicates to the greatest degree practicable the benefits that would have been so provided to each such resident. In the case of a taxable year with respect to which a plan is approved under subparagraph (B), this section (other than this subsection) shall not apply to any individual eligible for a distribution under such plan. In the case of a taxable year with respect to which a plan is not approved under subparagraph (B), rules similar to the rules of paragraph
(2)shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)). The payments made under this subsection shall be treated in the same manner for purposes of section 1324(b)(2) of title 31, United States Code, as refunds due from the credit allowed under this section. . The amendment made by this section shall apply to taxable years beginning after December 31, 2019.