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 1321PDF.

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.

U.S. citizens and resident aliens who aren't 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, and who was a bona fide resident of Puerto Rico for the two years before changing residency, can exclude from his or her U.S. income tax return the Puerto Rican source income that is attributable to the part of the year he or she was a bona fide resident of Puerto Rico.

Regardless of whether an individual is or isn't required to file a U.S. income tax return, the individual may 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. Residents of Puerto Rico who aren't 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. For more information on self-employment reporting requirements, see the Instructions for Form 1040-SS PDF and Instructions for Form 1040-PRPDF.

Child Tax Credit expanded to residents of Puerto Rico

Beginning with tax year 2021, eligibility for the Child Tax Credit expanded to residents of Puerto Rico with one or more qualifying children. The Child Tax Credit is up to $3,600 for each qualifying child for 2021 and up to $1,500 for each qualifying child for 2022.

Residents of Puerto Rico must file a federal tax return with the IRS to claim the Child Tax Credit, even if they don't have a filing requirement and have little or no income from a job, business or other source. The credit can be claimed on:

Form 1040-PR is a Spanish-language form. Form 1040 and Form 1040-SR have Spanish-language versions.

One of these tax returns can be filed to claim the Child Tax Credit even after the filing deadline. In fact, families who don't owe taxes to the IRS can file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025, without any penalty.