Governor signs 4 tax relief measures aimed at middle class

Gov. Jenniffer González Colón has enacted four measures she introduced in the island Legislature aimed at easing the tax burden on taxpayers, particularly the middle class.

By THE STAR STAFF

Gov. Jenniffer González Colón has enacted four measures she introduced in the Legislature aimed at easing the tax burden on taxpayers, particularly the middle class.

The initiatives stem from the work of the Tax Reform Committee, which the governor created prior to taking office.

The first measure, Law 177-2025 (Senate Bill [SB] 486, Administration Measure [AM] 43), establishes ABLE Accounts for individuals with disabilities by incorporating Section 1081.07 into Puerto Rico’s 2011 Internal Revenue Code. Modeled after the federal “Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act of 2014,” the law provides a secure mechanism for people with disabilities and their families to save for disability-related expenses without jeopardizing eligibility for essential federal programs. With the legislation, Puerto Rico joins all 50 U.S. states in implementing the program, promoting economic self-sufficiency for individuals with disabilities.

The second measure, Law 178-2025 (SB 487, AM 45), strengthens financial support for education by increasing the maximum annual deduction for contributions to education savings accounts from $500 to $1,000. The expansion benefits families preparing responsibly for future educational expenses for their children or dependents.

The third measure, Law 179-2025 (SB 494, AM 49), amends Puerto Rico’s Internal Revenue Code to raise the deduction limit for contributions to Individual Retirement Accounts (IRAs). The new cap aligns with the federal limit under Section 402(g) of the U.S. Internal Revenue Code, adjusted annually by the IRS. The change addresses a longstanding inequity, ensuring that Puerto Rico residents born on the island (or in the mainland U.S.) -- who are U.S. citizens -- are not subject to lower contribution limits for identical retirement instruments. The law underscores the administration’s commitment to tax fairness, financial planning and worker protection throughout life stages.

The fourth measure, Law 180-2025 (SB 502, AM 48), amends Puerto Rico’s Incentives Code to exempt gains from the sale of a primary residence located in Puerto Rico from income tax and the alternate basic tax for tax years beginning after Dec. 31, 2024. To qualify, the seller must not be a beneficiary of incentives under Section 2022.02 of Law 60-2019 and must have occupied the property continuously for at least two of the five years preceding the sale. The exemption aims to reduce home sale prices and encourage homeownership among Puerto Rican families.

The four new tax measures join five previously enacted laws: Law 64-2025, streamlining tax exemptions for nonprofits; Law 65-2025, standardizing tax filing dates for businesses; Law 66-2025, extending residential rent tax exemptions for 30 years; Law 72-2025, simplifying municipal and state sales tax collection through SURI; and Law 78-2025, exempting prescription medications from personal property tax.