HR257-118

1. Short title This Act may be cited as the Earned Income Tax Credit Equity for Puerto Rico Act of 2023.

2. Puerto Rico residents eligible for earned income tax credit Section 32 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: In the case of residents of Puerto Rico— the United States shall be treated as including Puerto Rico for purposes of subsections (c)(1)(A)(ii)(I) and (c)(3)(C), subsection (c)(1)(D) shall not apply to nonresident alien individuals who are residents of Puerto Rico, and adjusted gross income and gross income shall be computed without regard to section 933 for purposes of subsections (a)(2)(B) and (c)(2)(A)(i). The credit allowed under this section by reason of this subsection for any taxable year shall not exceed the amount, determined under regulations or other guidance promulgated by the Secretary, that a similarly situated taxpayer would receive if residing in a State. Subclause (II) of section 24(d)(1)(B)(ii) of such Code is amended by inserting before the period (determined without regard to section 32(n) in the case of residents of Puerto Rico). Section 7530(a)(1) of such Code is amended by striking calendar year 2021 and each calendar year thereafter and inserting calendar years 2021, 2022, and 2023. Section 7530(a)(1)(B) of such Code is amended by striking in the case of calendar years 2021 through 2025, the lesser of and inserting the lesser of. The amendment made shall apply to taxable years beginning after December 31, 2023. (n)Residents of Puerto Rico (1)In generalIn the case of residents of Puerto Rico— (A)the United States shall be treated as including Puerto Rico for purposes of subsections (c)(1)(A)(ii)(I) and (c)(3)(C), (B)subsection (c)(1)(D) shall not apply to nonresident alien individuals who are residents of Puerto Rico, and (C)adjusted gross income and gross income shall be computed without regard to section 933 for purposes of subsections (a)(2)(B) and (c)(2)(A)(i). (2)LimitationThe credit allowed under this section by reason of this subsection for any taxable year shall not exceed the amount, determined under regulations or other guidance promulgated by the Secretary, that a similarly situated taxpayer would receive if residing in a State..