CNMI Rev & Tax: See if you qualify for EITC

03/13/25 - Division of Revenue and Taxation director Daniel Alvarez said tax season is upon us and has this little advice to taxpayers out there who may not know it but could actually qualify for Earned Income Tax Credit.

According to the Internal Revenue Service, EITC helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe—and maybe increase your refund.

“The biggest thing that I want to really put out there is claiming federal tax credits. We have child tax credits, we have American Opportunity Tax Credits for students that are going to college, and our biggest tax credit is the Earned Income Tax Credit. We have almost 10,000 tax preparers in the CNMI that claim the Earned Income Tax Credit,” he said.

Sadly, Alvarez said there are still tax preparers out there who qualify for it but don't claim it because they're unaware that they qualify for the Earned Income Tax Credit. 

“What we're doing this year is this month we've put out a workshop—it's more of an outreach—to inform tax preparers to really look into the Earned Income Tax Credit to see if they qualify instead of just assuming that they don't qualify. Last year we paid out almost $23 million in Earned Income Tax Credit and that's a lot. There's a lot of tax preparers out there and we could be paying out more.”

To be more exact, Rev & Tax numbers show that it paid out $22.6 million in Earned Income Tax Credit in fiscal year 2024, compared to $17.8 million in FY 2023.

In addition, Rev & Tax also paid out $9.7 million in Child Tax Credit in FY 2024 compared to $8.9 million in FY 2023. As for the American Opportunity Tax Credit, $404,016 was paid out in in FY 2024 compared to $397,000 in FY 2023.

Alvarez also said this will be the first filing season where Rev & Tax will launch its new system to process the 1040 CM and it's called the Revenue Management Information System.

“It was built from the ground up and this will be the first time we're going to be using it this filing season. And the result of that may be some delays in tax processing. I just want to ask taxpayers to understand that these delays are coming from us migrating into a new system.”

He assured taxpayers though that Rev & Tax is still shooting for the release of the first batch of tax refunds, child tax, and EITC by April.

“But again, if there are delays, it will be because of the launch of the new tax system as we try to adapt and get used to the new tax system.”

Alvarez said the Revenue Management Information System definitely opens up the doors on what Rev & Tax can do with the end goal becoming digital.

“What I mean by that is filing your taxes online, making payments online, and checking the status of your tax returns and your tax refund online. And we'll be doing this through the citizen portal, which we'll be also launching this year, but may not be available to use for the public until later in the year. And by next filing season, taxpayers may be able to file their taxes online and pay online.”

As for the Business Gross Revenue Tax, which is Rev & Tax’s biggest revenue in taxes, Alvarez said they collected around $74 million in FY 2024, which is slight increase to the around $70 million they collected in FY 2023.

“It's a slight increase, but we're hoping that the economy would get better and the Business Gross Revenue Tax collection would reflect on that...Hopefully, numbers are going up. I see the collection numbers and it's definitely a reflection of how the economy is doing.”

Rev & Tax, under Alvarez’s baton, is also looking at making the whole business of paying taxes a lot smoother. 

“I found that there are businesses out there that are non-compliant because they're unaware of all their tax obligations. They're unfamiliar with all the tax laws. So, we want to do more outreach in educating these businesses. And not only in educating them, but making compliance easier. Because I think an easier way to comply will result in more compliance and that's one of the goals with going digital, right? So, if we make filing easy for you, then you're more likely to do it. If it's too difficult, then there's going to be more non-compliance.”

Alvarez also shared that Rev & Tax recently launched a new logo that consists of a proa and compass.

“The proa signifies the taxpayers navigating their tax obligations and the compass signifies DRT guiding the taxpayers in navigating their tax obligations. And then on the mast, it's a key symbol which symbolizes trust and security and confidence in the CNMI tax administration.”

And Rev & Tax’s rebranding if not confined to its shiny new logo alone, as Alvarez they’ve also made changes to their call center, streamlined their services at the window, and made customer experience at the cashier much better.

“We're going to do more seminars, more workshops, to just put information out there to help taxpayers understand their tax obligations...I've also gotten feedback that when new businesses move out here or when somebody is starting up a new business, there's not much information on our website to really guide them on all their funding obligations and their tax obligations...As I mentioned in the beginning of this is because every taxpayer has a right to good service...We want the taxpayers to comply with all the tax laws and their tax obligations. At the same time, the taxpayers expect good services from the tax administration. It's a partnership and I want to work together with the taxpayers and not against them.”

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Story by Mark Rabago