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Per IRS Tax Topic 901:

Topic 901 - 

Is a Person with Income from Puerto Rico Required to File a U.S. Federal Income Tax Return?

If you're a bona fide resident of Puerto Rico during the entire tax year, you generally aren't required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico. However, if you also have income from sources outside of Puerto Rico, including from U.S. sources, you're required to file a U.S. federal income tax return if such amount is above the U.S. filing threshold. Nevertheless, a bona fide resident of Puerto Rico with a U.S. filing obligation, generally won't report Puerto Rican source income on a U.S. income tax return.

If you're a bona fide resident of Puerto Rico and can exclude your Puerto Rican source income on your U.S. income tax return, you must determine your return filing requirement based on the filing thresholds shown in the individual tax return instructions. For more information on who is considered a bona fide resident of Puerto Rico and how to determine the amount of income that requires filing a U.S. income tax return, refer to Publication 570 and Publication 1321.

However, if you're a bona fide resident of Puerto Rico and a U.S. government employee, you must file a U.S. income tax return reporting all income received for performing services for the U.S. government, including services performed in Puerto Rico as a U.S. government employee. If you're a member of the U.S. Armed Forces or a civilian spouse of an active duty member of the U.S. Armed Forces, special income tax filing rules may apply to you. For more information, please refer to Publication 570 and Notice 2012-41.

To enter the amount of income from Puerto Rico you are excluding in the TaxAct® program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Other Income in the Federal Quick Q&A Topics menu to expand the category and then click Puerto Rico income exclusion
  3. The program will proceed with the interview questions for you to enter or review the appropriate information.

If you have no U.S. filing requirement but have income that is effectively connected with a trade or business in Puerto Rico, you must file Form 1040-SS or Form 1040-PR with the United States to report your self-employment income and, if necessary, pay self-employment tax. For more information on self-employment reporting requirements, see the instructions to these forms.

Note. TaxAct does not support Form 1040-PR.


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