A tax credit is an amount subtracted directly from the tax you owe. It's more powerful than a deduction. A $1,000 deduction saves you only a fraction (for example, about $129 if you're in the 14% bracket and the 92% reduction applies: $1,000 × 14% × 92%), while a $1,000 credit saves you $1,000. Some credits are refundable. If they're larger than your tax, the Departamento de Hacienda (Puerto Rico's Treasury Department, "Hacienda") pays you the difference as a refund.
To review how credits differ from deductions, see deductions and exemptions. This page summarizes the most common credits for individuals for tax year 2025 (returns filed in 2026), based on Hacienda publications.
The earned income credit
The Crédito por Trabajo is Puerto Rico's version of the Earned Income Tax Credit. It's set by Section 1052.01 of the 2011 Código de Rentas Internas (Internal Revenue Code of Puerto Rico) and adjusted for inflation every year based on the adjustments the IRS publishes. You claim it on Schedule CT Individual of the income tax return (planilla, Form 482). SURI (Hacienda's online system) and certified software figure it automatically. According to Hacienda, you receive the credit through your return or by check. On the return, it's added to your withholding and payments, so it can increase your refund.
Amounts for 2025
These are the parameters from Internal Revenue Informative Bulletin (Boletín Informativo) No. 26-01, dated February 17, 2026:
| Qualifying children | Percentage of earned income | Maximum credit | Phase-out starts (single / married filing jointly) | Fully phased out (single / married filing jointly) |
|---|---|---|---|---|
| None | 15% | $1,794 | $19,130 / $21,530 | $31,090 / $33,490 |
| One | 33.98% | $4,186 | $21,530 / $26,310 | $37,081 / $41,861 |
| Two | 40% | $6,576 | $25,110 / $29,900 | $44,237 / $49,027 |
| Three or more | 44.83% | $7,774 | $25,110 / $29,900 | $47,833 / $52,623 |
The credit rises with your earned income until it reaches the maximum. Then it stays flat. Starting at the phase-out point, it drops by a percentage of the income above that point (15% with no children; 26.92% with one; 34.38% with two; 34.21% with three or more) until it reaches zero.
In the written-out version of Bulletin 26-01, the maximum for three or more children appears as "seven thousand seven hundred sixty-four dollars," but in figures it appears as $7,774. Hacienda's page on the credit and the bulletin's own calculations agree on $7,774, which is the figure we use here.
Who qualifies
According to Hacienda's page on the credit for 2025:
- Residency. You were a resident of Puerto Rico for the entire year and at the time you file (both spouses, if married).
- Age. You were 19 or older on the last day of the tax year.
- Earned income. Wages, tips, pensions and self-employment business income subject to Social Security tax. If you're self-employed, you need a current Certificado de Registro de Comerciante (merchant registration certificate).
- Return. You file your 2025 return on time (including the extension). You can't file as married filing separately or be someone else's dependent.
- Qualifying children. Your children or your spouse's that you can claim as dependents, age 18 or younger at the end of the year (up to 25 if full-time students), who were residents of Puerto Rico for the entire year.
- Social Security. Valid numbers for you, your spouse and each child.
A single mother with one child and a $25,000 salary. Her income is above the $21,530 phase-out point. The $4,186 maximum credit is reduced by 26.92% × ($25,000 − $21,530) = $934.12. Her credit is $3,251.88.
A married couple with two children and $35,000 of combined earned income. The $6,576 maximum is reduced by 34.38% × ($35,000 − $29,900) = $1,753.38. Their credit is $4,822.62.
A person with no children and a $10,000 salary. The credit is 15% × $10,000 = $1,500, which is below the $1,794 maximum.
Credits for people 65 and older and pensioners (Form 481.1)
Section 1052.02 of the Code provides two refundable compensatory credits for low-income people. According to Internal Revenue Carta Circular (Circular Letter) No. 26-12, dated June 26, 2026:
Credit for people 65 or older. Every Puerto Rico resident who is 65 or older on the last day of the year is entitled to a $200 credit if their gross income, including excluded items, is not more than $15,000 and no one else claimed them as a dependent. For married couples, each spouse can claim it if their combined income is not more than $30,000. The credit can increase to $400 if a General Fund net revenue test set in the Code is met.
Compensatory credit for low-income pensioners. Residents receiving a pension from the government and Judiciary retirement systems, the Teachers' Retirement System, the University of Puerto Rico, the Electric Power Authority or the private sector are entitled to $300 if that pension is their only source of income and it's not more than $4,800 a year. For married couples, each spouse must meet the requirements separately.
How to claim them. Only with Form 481.1, filed electronically in SURI or through a tax professional. For tax year 2025, filing opened July 2, 2026, and the deadline is Wednesday, October 14, 2026. Hacienda doesn't accept the paper form. Each year's dates are on the tax calendar.
You can't combine them. You can't receive these credits if you claimed the earned income credit on your return for the same year. If you're 65 or older and working, compare which one works better for you. CC RI 26-12 also states that the additional assistance program for low-income people 65 or older (Section 1052.02(e)) is not available for 2025.
More details for retirees in pensions and retirees.
Other credits on the return
American Opportunity Credit (Schedule B2 Individual). This is a federal benefit that bona fide residents of Puerto Rico claim on their Hacienda return for college tuition, fees and required course materials. According to the 2025 instruction booklet, it's 100% of the first $2,000 of expenses plus 25% of the next $2,000, up to $1,000 per student, and it's refundable. Your adjusted gross income can't be more than $90,000 ($180,000 for married couples filing jointly), and married couples filing separately don't qualify. You can claim it for a maximum of four years per student, and you must submit evidence, such as Form 480.7G from the school.
Credit for taxes paid outside Puerto Rico (Schedule C Individual). If you paid income tax to the United States, a state or a foreign country on income that is also taxed here, you can claim a credit, subject to limits. This is common for people who worked part of the year elsewhere or who have investment income from abroad.
Alternate basic tax credit. If in prior years you paid alternate basic tax in excess of the regular tax, you can recover part of it in years when the regular tax is higher, within limits set by Schedule O Individual.
Investment and donation credits. There are credits for investments in certain activities (tourism, film, housing and others) and for donations to some foundations. Credits granted since Hacienda implemented the Tax Credit Manager (Manejador de Créditos Contributivos, MCC) in SURI are claimed as recorded there. They usually require a prior determination from Hacienda or another agency.
What is not a Hacienda credit
The federal Child Tax Credit. Puerto Rico families can claim it, but with the IRS, on Form 1040-SS. See Child Tax Credit.
The 2025 tax relief payment. The payment under Joint Resolution 6-2026 was a separate program, not a credit or a refund, according to Hacienda's guidance. You can read about it in news.
Frequently asked questions
Do I have to apply for the earned income credit separately?
No. You claim it on the same return, with Schedule CT Individual. If you file in SURI, the system figures it with the information you enter. The key is to mark your children as eligible for the credit on Schedule A1 Individual and to have their Social Security numbers right. See how to file your return.
I'm self-employed. Can I get the earned income credit?
Yes, if your income is subject to Social Security tax and you have a current Certificado de Registro de Comerciante for 2025, according to Hacienda. See also self-employed workers and the Registro de Comerciantes (merchant registration).
I'm 67 and my only income is Social Security. Which credit applies to me?
If your gross income, including excluded items, is not more than $15,000, you may qualify for the credit for people 65 or older with Form 481.1. According to Hacienda, people who receive Social Security must submit Form SSA-1099 to certify their income. For 2025, the deadline is October 14, 2026.
Do the earned income credit amounts change every year?
Yes. The Code requires adjusting them for inflation, and Hacienda publishes the new amounts in an informative bulletin after the IRS publishes its adjustments. The 2026 amounts will be known when Hacienda issues that bulletin.
Sources
- Departamento de Hacienda, "Boletín Informativo de Rentas Internas Núm. 26-01: ajuste por inflación al Crédito por Trabajo para el año contributivo 2025". hacienda.pr.gov
- Departamento de Hacienda, "Crédito por Trabajo (Earned Income Tax Credit o EITC)". hacienda.pr.gov
- Departamento de Hacienda, "Carta Circular de Rentas Internas Núm. 26-12: Formulario 481.1 para el año contributivo 2025". hacienda.pr.gov
- Departamento de Hacienda, "Folleto de Instrucciones, Planilla de Contribución sobre Ingresos de Individuos 2025" (rev. 27 de febrero de 2026). hacienda.pr.gov
- Departamento de Hacienda, "Hacienda paga sobre $27 millones en créditos reembolsables a seniors y a pensionados de bajos recursos" (8 de julio de 2026). hacienda.pr.gov
787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.
