By Gerardo R. Partido
Variety News Staff

CONGRESSWOMAN Madeleine Z. Bordallo, who is attending the ongoing Interagency Group on Insular Affairs meeting in Washington, D.C., urges the federal government to help Guam fund its earned income tax credit obligations.
Bordallo has asked the IGIA’s help to lobby for the implementation of a cost-sharing arrangement between the federal government and the government of Guam in financing the payment of EITCs.
“The treasuries of Guam and the Virgin Islands are obligated to refund to taxpayers the EITC despite the fact that our local governments do not collect FICA (Federal Insurance Contributions Act) taxes,” Bordallo said.
She added that the territorial treasurers can not financially sustain these federal tax obligations without an undue impact on their budgets and cash flow.
“The IGIA should work with the Department of the Treasury and the governments of Guam and the Virgin Islands to implement a fair and consistent policy of shared federal and territorial responsibilities for administering the EITC in a manner similar to that which has been agreed upon for the payment of the Additional Child Tax Credit,” Bordallo said in the statement she made before members of the IGIA.
She explained that while Guam and the U.S. Virgin Islands are mirror code tax jurisdictions and are each required to honor and implement refundable tax credits such as the EITC, the cost of these tax credits is disproportionately high in Guam and in the Virgin Islands.
At present, taxpayers in Guam and in the Virgin Islands contribute in the same manner to payroll taxes under the Federal Insurance Contributions Act as taxpayers do in the 50 states and in the District of Columbia.
Despite these contributions, Bordallo said there is no federal support for the EITC or ACTC in Guam or the Virgin Islands.
She urged IGIA to work with the Department of the Treasury and the governments of Guam and the Virgin Islands to implement a fair and consistent policy of shared federal and territorial responsibilities for administering the EITC and the ACTC.
This is the fourth time that Bordallo has placed before the IGIA the unresolved issue of fair financing for the EITC in Guam and in the Virgin Islands.