Atalig: PUA is taxable

With about a $15-million payment for the Pandemic Unemployment Assistance rolling out this week, the Department of Finance is reminding all who are set to receive the federal assistance that PUA is taxable.

“The PUA is taxable,” Finance Secretary David Atalig said. “The PUA applicants or recipients are able to get their federal tax taken out. I believe it’s 10% of the amount that they are receiving. There is also a local tax, but we’re not taking that out at the point of receiving your funds.”

According to Atalig, every recipient will receive a Form 1099-G by Jan, 30, 2021, in time for the filing of taxes for 2020. The form will show the total benefits paid, and any federal or territory income taxes withheld in the previous calendar year.

“Those will come into effect, and depending on the amount you received, they are taxable. And so, I just want [everyone] to be aware of that. Just like any benefit or any income you receive, they are taxable one way or the other, whether it’s the federal government or through local tax,” he added.

Also, as stated in the PUA Benefits Rights Information Handbook issued by the CNMI Department of Labor, as no adjustments are made for repayments of overpaid benefits, recipients would need to keep receipts of the repayment for their tax returns.

Any change in address needs to be submitted to CNMI Labor to receive Form 1099-G.

Child tax

The Department of Finance has already submitted its request to the Internal Revenue Service for the first batch of child tax.

“We hope to have that out the next week or two, ahead of our schedule,” Atalig said.

“We’re giving ourselves 30 days after the deadline of July 15. However, we already have a good amount that has been entered into the system. So, instead of just keeping that in waiting, I decided to try to get that out to our people who really, really need it, and expect to have our first batch in a week or two,” he added.

As for PUA, child support can be deducted from it. The Department of Labor handbook states that the CNMI Office of the Attorney General enforces court-ordered child support obligations and can intercept PUA and Federal Pandemic Unemployment Compensation benefits.

“The amount deducted is based on an order or orders for income withholding. The deductions may be limited to the maximum allowable under federal law,” Atalig added.