If you are a United States citizen or resident alien and are a bona fide resident of Puerto Rico during the entire tax year, you generally are not 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 are 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 will not report Puerto Rican source income on a U.S. income tax return. A tax year for calendar year filers is January 1 to December 31.
If you are 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 about how to determine the amount of income that requires filing a U.S. income tax return, refer to Publication 570 and Publication 1321 (PDF).
However, if you are a resident of Puerto Rico and a U.S. government employee, including members of the U.S. Armed Forces, you must file an income tax return reporting all income received for performing services for the U.S. government. In addition, special rules under the Military Spouses Residency Relief Act (MSRRA) apply to civilian spouses of active duty members of the U.S. Armed Forces who work in Puerto Rico but retain their tax residency status in one of the 50 states or the District of Columbia and have the same tax residency as their spouses before the move. If these spouses earn compensation while working in Puerto Rico, e.g., income from wages, salaries, tips, or self-employment, they will only file a U.S. income tax return reporting such compensation. For more information on how MSRRA applies to civilian spouses, refer to Publication 570 and Notice 2012-41 available on IRS.gov.
U.S. citizens and resident aliens who are not bona fide residents of Puerto Rico during the entire tax year, are required to report all income from worldwide sources on their U.S. income tax return. However, a U.S. citizen who changes residence from Puerto Rico to the United States, and who was a bona fide resident of Puerto Rico for a period of at least two years before changing residency, can exclude any Puerto Rican source income from his or her U.S. income tax return attributable to the time he or she was still residing in Puerto Rico for part of the year.
If a bona fide resident of Puerto Rico does not have a U.S. income tax filing requirement, he or she may nevertheless have an obligation to file a return with the United States reporting self-employment income derived from a trade or business in Puerto Rico and/or elsewhere. Such individuals must file Form 1040-SS (PDF) or Form 1040-PR (PDF) with the United States to report self-employment income and if necessary, pay self-employment tax. For more information on self-employment reporting requirements, see the Form 1040-SS Instructions (PDF) and Form 1040-PR Instructions (PDF).
Page Last Reviewed or Updated: December 16, 2014