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Per IRS Topic No. 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 in the upper left-hand corner, then click Federal.
  2. Click Other Income in the Federal Quick Q&A Topics menu to expand, then click Puerto Rico income exclusion.
  3. Continue with the interview process to enter all of 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 U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico) or Form 1040-PR Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico) 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.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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