Child tax credit checks out this week

The finance department is preparing the release of over $600,000 worth of checks that will be paid to local taxpayers under the Additional Child Tax Credit Program, which the US Internal Revenue Service implements in the CNMI following months of oversight.

Finance Secretary Lucy Dlg. Nielsen said the department is poised at releasing the checks this week, adding that DOF officials and personnel are now processing the applications submitted to the Division of Revenue and Taxation.

Rushing to the regular meeting of the government’s finance managers on the Finance Management Improvement Plan at the Capitol Hill yesterday, Ms. Nielsen failed to give further details especially on the number of families who will receive their checks first.

The finance chief was however sure that the checks will be ready for release this week and that processing of applications are based on a first-come, first-serve basis.

Initial estimates placed the number of families eligible to receive refunds under the Additional Child Tax Credit Program to 3,500 families. The credit is given to American taxpayers who have three or more dependent children under 17 years old.

Around $10 million in additional cash is expected to flow into the Commonwealth economy from its implementation in the CNMI.

Under the program, individuals or couples who have three or more children under the age of 17 are entitled to a tax refund of $400 per child for 1998, and $500 per dependent for 1999 and onwards.

The Additional Child Tax Credit Program was implemented in the mainland US beginning 1998. All insular territories were left out. IRS started reviewing the law only after a resident of one of the US territories asked for a refund.

IRS has, since then, been in communication with the local tax agencies in Guam, American Samoa, Puerto Rico, and the US Virgin Islands for the implementation of the program.

The tax credit will be paid to recipients out of funds from the US Treasury although the claims will be filed to the Department of Finance’s Revenue and Taxation Division.

IRS has developed a framework which has been put in place in coordination with the CNMI taxation division, in order to do the paper works for the claim within 15-20 minutes.

IRS officials, who came to Saipan to announce the program’s implementation here, previously said the tax credits will be refunded directly to the individual recipient in no more than 45 days after the filing date.

They also mentioned that claims for 1998 should have been made on or before April 15, 2002.

IRS and the Revenue and Taxation Division last year initially processed tax refund claims for 1998 and 1999, while succeeding processing will be right on target.

Married couples whose average annual income exceeds $110,000 but with three dependent children are also eligible to receive tax refund although $50 will be deducted for each child.