Get the up-to-date Publication 1321 (Rev. 10-2022). Special Instructions For Bona Fide Residents Of Puerto Rico Who Must File A U.S. Individual Income Tax Return (Form 1040 or Form 1040-SR)-2024 now

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An individual is considered to be a bona fide resident of Puerto Rico if three tests are met. The individual must be present for at least 183 days during the taxable year in Puerto Rico or satisfy one of the other four presence tests (the presence test).
Puerto Rican residents are taxed in Puerto Rico on their worldwide income, no matter where the income is sourced. Puerto Rican non-residents are only taxed in Puerto Rico on their Puerto Rico-source income.
If you move to the island, you can legally pay none. Theres also no capital gains tax. You just have to give 4 percent of your income to Puerto Rico. The tax break was started by a Puerto Rican politician whod watched years of high taxes fail to improve life on the island.
If you are a bona fide resident of Puerto Rico during the entire tax year, youll file the following returns: A Puerto Rico tax return (Form 482) reporting your worldwide income. A U.S. tax return (Form 1040) reporting your worldwide income. However, this 1040 will exclude your Puerto Rico income.
Keep in mind that salary from Puerto Rico does not qualify for FEIE. It is taxed in PR at standard rates plus Social Security and Medicare tax.
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To exclude Puerto Rico income from a return where the taxpayer is a bona fide resident of Puerto Rico, from the Main Menu of the tax return (Form 1040) select: Income. Other income. Section 933 Excluded Income from Puerto Rico.
If you are a bona fide resident of Puerto Rico during the entire tax year, youll file the following returns: A Puerto Rico tax return (Form 482) reporting your worldwide income. A U.S. tax return (Form 1040) reporting your worldwide income. However, this 1040 will exclude your Puerto Rico income.
You must file a Puerto Rico tax return for income earned in Puerto Rico, as well as a United States tax return for income earned anywhere in the world. Taxes paid to Puerto Rico on income that is not exempt on the US tax return are eligible for a foreign tax credit.
Residents of Puerto Rico who arent required to file a U.S. income tax return must file Form 1040-SS or Form 1040-PR with the United States to report self-employment income and if necessary, pay self-employment tax.
If youre a bona fide resident of Puerto Rico during the entire tax year, you generally arent required to file U.S. federal income tax returns if your only income is from sources within Puerto Rico.

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