Speaker Therese Terlaje on Friday proposed amendments to the fiscal 2022 budget bill that would set aside the anticipated federal cash reimbursement of the earned income tax credit (EITC) and child tax credit payments in the FY 2022 to lock them away and ensure they are not appropriated for other purposes.
The proposed amendments would ensure that GovGuam has a sufficient amount of cash to quickly pay all tax refunds eligible for the EITC refund and all Child Tax Credit payments.
The amendments are similar to her Bill 175-36 that was introduced prior to the release of the substitute Bill 55-36, the FY 2022 appropriations bill.
“With the influx of federal dollars to Guam, we must make it very clear that our priority is to get this money out to the people, especially when it comes to their tax refunds, Earned Income Tax Credits and Child Tax Credits," Terlaje said.
"In previous years, GovGuam has held on to tax refunds in order to pay itself first. We have seen great improvements and want to continue to aim for the payment of refunds within 30 days. Prompt payment of EITC and CTC will help to offset the loss of the PUA for families in need,” the speaker added.
Part of the American Rescue Plan Act of 2021 included language that would provide a 100 percent cost reimbursement from the federal government for EITC obligations to the government of Guam beginning in 2021 and for all following tax years.
Prior to the passage of the American Rescue Plan Act of 2021, the EITC obligations for Guam would range between $55 million and $60 million annually and would be paid using local tax revenues.
The American Rescue Plan Act of 2021 also included language that would provide federal funds to Guam to pay Child Tax Credit obligations which in previous years would amount to $30 million paid using local tax revenues. The ARP Act of 2021 also increased the amount of Child Tax Credits per family from a maximum amount of $2,000 to now $3,600.