Am Samoa taxpayers come one step closer to earned income tax credits

Pago Pago, AMERICAN SAMOA — A House bill providing earned income tax credit (EITC) payments pursuant to the American Rescue Plan Act of 2021 to the citizens and residents of American Samoa was introduced in the House of Representatives this week.

The bill is sponsored by Representatives Vailiuama Steve Leasiolagi and Lavea Fatulegae’e Palepoi Mauga.

As part of the American Rescue Plan Act of 2021, passed by Congress and signed into law by President Biden, American Samoa was allocated $16million for eligible taxpayers, provided the territory passes local legislation to adopt the EITC.

The EITC section of American Samoa’s code was repealed in 1980, therefore legislation is required for American Samoa to receive the funds.

Upon passage by the Fono and signing of the law by the Governor, the Department of Treasury plans to disburse EITC’s to eligible taxpayers by September 2022.

Only those who filed their 2021 Form 390 and 390EZ earned income will participate in the EITC program.

According to the bill, the American Rescue Plan Act of 2021 was enacted by Congress on Mar. 11, 2021, providing various sources of financial relief for individuals, families and businesses. The individuals eligible for the EITC shall include U.S citizens, U.S Nationals, AS permanent residents, or a resident with a foreign registration receipt card (ID card) and are lawful residents of AS with a U.S Social Security card.

Due to the structure of the AS tax code, an amendment to the code is required to enact this provision for the territory; and in order for the territory to immediately receive certain tax credits, this Act shall become effective upon passage by the Legislative and approval by the Governor.

According to the bill, in the case of an eligible individual with qualifying children, the earned income amount is $10,641 while the phaseout amount is $21,280.

In the case of an eligible individual with a qualifying child or more qualifying children, the earned income amount is $14,949 while the phaseout amount is $29,896, according to the bill.

In the case of an ineligible individual with a qualifying child or no qualifying children, the earned income amount is $9,814 while the phaseout amount is $19,926.

In the case of a joint return filed by an eligible individual and such individual’s spouse, the phaseout amount shall be increased by $5,000.

If an individual is the qualifying child of a taxpayer for any taxable year or such taxpayer beginning in a calendar year, such individual shall not be treated as eligible for any taxable year of such individual beginning such calendar year.