FPUC recipients to file federal income tax in 2021
By Pedro Correa Henry
Special to The Star
It’s official. Every unemployment insurance and Pandemic Unemployment Assistance (PUA) recipient who received Federal Pandemic Unemployment Compensation (FPUC) payments of $600 weekly must file for federal income taxes in 2021, Puerto Rico Labor and Human Resources (DTRH by its Spanish initials) Secretary Carlos Rivera Santiago confirmed Thursday.
Rivera Santiago told the Star that this is due to the fact that the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, which includes both U.S states and territories, suggests that the FPUC is taxable. Likewise, a post from the Office of Unemployment Compensation stated that the compensation will be subject to 10 percent federal withholding tax if the claimant chose to withhold from the unemployment insurance or PUA benefits.
“Both this agency and the Treasury Department are expecting guidelines from the federal government”, Rivera Santiago said. “As soon we get them, we can decide how to address and help citizens during this process.”
The news has caused some concern, as many Puerto Rico residents are not required to file federal income tax returns. Rivera Santiago said citizens should remain calm as the withholding will apply to tax filings next year. Meanwhile, in response to suggestions that the situation amounts to a fiscal trap, Rivera Santiago declared that, as the DTRH secretary, there is not much he can say.
“The law was approved by Congress for all [U.S.] states and territories. I cannot say much about this,” he said. “It is what the Congress approved and the Department must follow suit.”
Improvements in technology help shrink caseload Amid the 522,384 unemployment insurance claims, Rivera Santiago said, 362,104 applicants are getting their unemployment and PUA insurance payments. However, as The Star inquired into the pending cases for the FPUC, the secretary suggested that, although this compensation is added automatically to both unemployment and PUA benefits, citizens should consult with the agency to solve such issues.
“The $600 is added automatically from the moment you get unemployment benefits,” Rivera Santiago said. “It is important that every citizen should also know that you must qualify for this aid. If you qualified for partial payment, you will not get the [full] $600.”
The official also noted that in June the agency disbursed $2.3 billion for unemployment and PUA claimants, compared to $1.8 billion the previous month. Meanwhile, the DTRH still has 9,727 pending payments. Although Rivera Santiago still considers that an alarming sum, in May, around 50,000 payments were pending. He said the decrease has been possible as the entity improved its online platforms.
“For two weeks, the agency has been using Turnos PR, and we found tools within [that platform] that helped claimants address specific issues. One of them has been an antiquity list, which consists of the many unsolved unemployment cases involving debatable points,” the DTRH chief said. “We have noticed that, from more than 300 applicants that we received at the [Pedro Rosselló] Convention Center, we now get between 240 and 270 applicants a day.
There’s an improvement, although we would like to see those numbers reduce.”
The aid that has provided unemployment and PUA recipients $600 will end on July 25. However, the DTRH announced Wednesday that beneficiaries will receive up to $240 a week.