Details of Public Law 117-2, section 9612 , Application of Child Tax Credit in Possessions

The IRS will make payments to US territories with mirror code tax systems for tax years beginning after 12/31/2020, that equal the loss in revenue caused by the territory’s child tax credit mirror code tax systems for the taxable year. However, the child tax credit will not be allowed under the IRC to a territory resident if the mirror code tax systems allows a child tax credit against income taxes of the territory.

For taxable years beginning after 12/31/2020, a Puerto Rico bona fide resident may claim a fully refundable child tax credit by filing a return with the IRS. However, advance child tax credit payments are not available to Puerto Rico residents.

Under certain circumstances, the IRS will estimate and make payments to the American Samoa equal to the estimated aggregate benefits that American Samoa residents would have been allowed as a child tax credit if a mirror code tax system had been in effect in the taxable year. In addition, American Samoa bona fide residents may claim a fully refundable child tax credit by filing a return with IRS, under rules similar to those discussed above for Puerto Rico.

California does not conform to the federal child tax credit. Also, California does not have child tax credit payment sections relating to US territories, Puerto Rico, and the American Samoa.

California has a refundable Young Child Tax Credit (YCTC). The YCTC is allowed to an eligible individual who has been allowed the California Earned Income Tax Credit (EITC), has at least one qualifying child for the EITC, and has one qualifying child under the age of six years old as of the last day of the year. The maximum amount of the refundable credit is $1,000 and phases in at $25,000 of earned income and phases out at $30,000.