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First Work Experience (Student)
Tax incentive for students participating in work-study or internship programs, supporting youth workforce development.
7 min
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Section Code:
2025.01
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Purpose:
Individuals — Section 2025.01
Overview
The First Work Experience (Student) program under Section 2025.01 of Act 60-2019, as amended, provides tax benefits to students and educational institutions that participate in qualifying work-study or internship programs. This program supports youth employment and workforce development by creating incentives for students to gain practical work experience while pursuing their education in Puerto Rico.
Qualifying students who participate in approved work-study or internship programs may receive preferential tax treatment on compensation earned through these programs. The program is designed to lower barriers to youth employment, encourage practical skill development, and help students offset educational costs through part-time work.
The key distinction of this program compared to standard employment is its focus on students actively pursuing education. Benefits apply to work performed as part of structured educational programs rather than general employment. The program recognizes that providing tax relief on student work income helps make education more affordable and accessible.
This program complements other workforce development initiatives by specifically targeting students in educational programs. By reducing the tax burden on student work income, Puerto Rico aims to encourage youth workforce participation and practical skill development.
Key Benefits
Reduced Tax on Student Work Income
Students participating in qualifying programs may receive reduced Puerto Rico income tax on compensation earned through approved work-study or internship positions. The specific tax treatment depends on program terms, but preferential rates support student workforce participation.
Workforce Development
The program helps students gain practical work experience while pursuing education, developing skills that improve long-term employment prospects and career outcomes.
Educational Cost Offset
By providing tax-advantaged work opportunities, the program helps students earn income to offset educational expenses including tuition, books, and living costs.
Requirements & Obligations
Student Enrollment Requirements
Participating students must be enrolled in qualifying educational programs at approved institutions in Puerto Rico. Full-time or part-time enrollment status requirements are specified in program regulations.
Qualifying Work Programs
Work must be performed as part of approved work-study or internship programs that meet statutory requirements. Programs must provide genuine educational value and skill development, not merely provide low-cost labor.
Work Hour Limitations
Programs typically limit work hours to ensure students maintain focus on educational activities. Maximum weekly or semester hour requirements protect student academic performance.
Reporting Requirements
Students and participating employers or institutions must file required reports documenting program participation, hours worked, and compensation earned.
How to Apply
Students typically apply for participation through their educational institutions' financial aid or career services offices. Institutions coordinate with employers to establish qualifying work positions and manage program administration.
Eligibility verification includes confirmation of enrollment status, academic standing, and program approval. Students must maintain qualifying status throughout participation.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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