Department of Revenue and Taxation director Dafne Shimizu said that recent changes to the Child Tax Credit will mean more money for GovGuam.
She said that in the past, GovGuam had paid out the Child Tax Credit but was not reimbursed by the federal government.
That will change, however, under the American Rescue Plan Act.
Shimizu said that historically, GovGuam has paid out about $30 million a year in the Child Tax Credit.
Starting this year, that’s money that GovGuam will be able to use for its own purposes.
Also, Shimizu said that for this year, Congress has increased the amount of the Child Tax Credit and will allow jurisdictions to pay 50% of it in advance starting in July.
Usually, the Child Tax Credit maxes out at $2,000. This year, those with a child older than 5 years will receive $3,000 and those with a child 5 years old and under will receive $3,600 dollars and all recipients can receive half of that in a lump sum starting next month.
“We are still working with the IRS on this matter because again, like with the EIPs and with any of these new programs, we’re required to have an implementation plan, our counterparts at the IRS have been working with us and also of course the other Insular Areas on this matter, and we’re trying to gather all the information so that we can roll this out in Guam. And we do intend to make payments in advance. The ARP Act did allow for the territories to opt out of the advance, meaning that the territories don’t have to pay the advance if they don’t wish to, but of course, you know…and we’ve talked with the governor about this multiple times, to get the money to our people is hugely important, so the option…the idea of not electing to…or opting out…is really not going to happen,” Shimizu said in an interview with NewsTalk K57’s Patti Arroyo.
Shimizu said that although they’re committed to getting money to Guam’s residents as soon as possible, one challenge that Rev and Tax has had to contend with is the program’s complexity.
“One of the challenges with this program is that it’s quite complicated. With EIP, we saw EIP 1, EIP 2, EIP 3…it was relatively straightforward, and of course, as you saw by the time we got to EIP 3, we’d already done two other federal EIP programs, plus the local Ayuda Mangafa. So we had kind of a system and we had the experience doing that. But the advance child tax credit, for it to be paid in advance, that’s new,” Shimizu said.
Shimizu also said that Rev and Tax has already drafted an application form and guidelines for the ALL RISE act and that they’re just waiting on American Rescue Plan Act guidelines to be finalized before they roll that program out.