Puerto Rico Treasury Readies to Disburse CARES Act Aid As Soon As Guidelines Are Issued
Fiscal Board Approves $400 Million Cash Advance
SAN JUAN – Puerto Rico Treasury Secretary Francisco Parés Alicea said Tuesday that while the U.S. Treasury issues guidelines for the disbursement of the Coronavirus Aid, Relief and Economic Security (CARES) Act assistance, his department is considering steps to disburse the funds as quickly as it can.
The federally established Financial Oversight and Management Board (FOMB) for Puerto Rico approved the island government’s request and allowed a cash advance of up to $400 million to “to expedite the distribution of the transfers by using Commonwealth funds until the federal funds arrive,” it said in a statement Tuesday. “The Oversight Board expects that this advance of Commonwealth funds will be reimbursable in its entirety with federal monies.”
“Considering that we are not the only jurisdiction that is in this position, we presented to the FOMB a proposal to disburse a portion of the federal incentive agreeing to the use of about $400 million from the secretary’s account, and thus accelerate the disbursement of a part of the economic aid package that will be received under the CARES Act. The endorsement of the FOMB puts us in a better position so that as soon as the Federal Treasury approves the guidelines, the aid can begin to be sent without further delay,” Parés said in a release.
The official said that several alternatives are being considered for the disbursement of the incentive.
“The talks with the Treasury and the IRS are very advanced and while the guidelines are defined, we are taking all the necessary steps to ensure that the process is streamlined, coordinated and integrated. In addition, to advance the availability of funds, we are making technical adjustments to the Unified Internal Revenue System [SURI by its Spanish acronym], to begin immediately,” Parés added.
Among the financial aid and grants to be provided under the CARES Act grants to face the COVID-19 pandemic is more than $3 billion for Puerto Rico.
For the disbursement of the aid, the secretary explained that the information available from the 2019 income tax returns will be used. He urged people who have not filed their returns yet, to do so.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child, according to the Internal Revenue Service (IRS).
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return, the IRS said.
The distribution of the payments is expected to begin in about two weeks. These will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.
“Aware of the economic needs that Puerto Ricans are facing and in response to the request of the Governor, Wanda Vázquez Garced, we are taking concrete steps to reduce the delay in the process and send aid as quickly as possible. Likewise, we continue to quickly process the requests for the $500 incentive for self-employed workers, as well as the processing of the income tax returns for…2019 and sending the reimbursements that apply. In addition, [the Puerto Rico Treasury Department is] implementing other measures to inject the cash flow, and benefit the taxpayer,” Parés assured.