Table of Contents
For the latest information about developments related to Publication 570, such as legislation enacted after it was published, go to www.irs.gov/pub570.
Determining bona fide residence in a possession. For tax years beginning after August 26, 2015, there is a new rule for purposes of determining whether you are a bona fide resident of a possession. The new rule will generally allow you to be considered present in the possession for any day (up to 30 days) that you are outside the possession and outside the United States. Because most individual taxpayers have a calendar year that ends December 31, this new rule will affect most taxpayers for the 2016 income tax return filed in 2017. See item 4 under Days of presence in a possession in chapter 1, for additional information on this new rule.
Self-employment tax. Bona fide residents of a U.S. territory who have self-employment income must generally pay self-employment tax to the United States. Self-employment tax includes both social security and Medicare. Bona fide residents may be subject to U.S. self-employment tax even if they have no income tax filing obligation with the United States. See Self-Employment Tax in chapter 4 for more information.
Additional Medicare Tax. You may be required to pay Additional Medicare Tax. Also, you may need to report Additional Medicare Tax withheld by your employer. For more information, see Additional Medicare Tax under Special Rules for Completing Your U.S. Tax Return in chapter 4.
Net Investment Income Tax. The Net Investment Income Tax (NIIT) imposes a 3.8% tax on the lesser of an individual's net investment income or the excess of the individual's modified adjusted gross income over a specified threshold amount. Bona fide residents of Puerto Rico and American Samoa who have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer's modified adjusted gross income from non-territory sources exceeds a specified threshold amount. Also, bona fide residents must take into account any additional tax liability associated with the NIIT when calculating their estimated tax payments.The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. For more information, see Net Investment Income Tax under Bona Fide Resident of American Samoa and Bona Fide Resident of Puerto Rico in chapter 3. Because bona fide residents of the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands do not generally have a federal income tax return filing obligation, the NIIT generally does not directly apply to them. These residents should contact their local territorial tax department for guidance on the possible mirrored application of the NIIT in these jurisdictions.
Individual taxpayer identification numbers (ITINs) for aliens. If you are a nonresident or resident alien and you do not have and are not eligible to get a social security number (SSN),
you must apply for an ITIN. For details on how to do so, see Form W-7, Application for IRS Individual Taxpayer Identification
Number, and its instructions. Allow 6 weeks for the IRS to notify you of your ITIN (8-10 weeks if submitted during peak processing
periods (January 15 through April 30) or if you are filing from overseas). If you already have an ITIN, enter it wherever
your SSN is requested on your tax return. ITINs expire if not used on a federal income tax return for five consecutive years.
The IRS will begin deactivating ITINs in 2016. For more information, go to www.irs.gov/Individuals/Individual-Taxpayer-Identification-Number-ITIN.
Electronic filing. . You can e-file Form 1040-SS and Form 1040PR. For general information about electronic filing, visit www.irs.gov/efile.
Earned income credit (EIC). Generally, if you are a bona fide resident of a U.S. possession, you cannot claim the EIC on your U.S. tax return. However, certain U.S. possessions may allow bona fide residents to claim the EIC on their possession tax return. To claim the EIC on your U.S. tax return, your home (and your spouse's if filing a joint return) must have been in the United States for more than half the year. If you have a child, the child must have lived with you in the United States for more than half the year. For this purpose, the United States includes only the 50 states and the District of Columbia. Special rules apply to military personnel stationed outside the United States. For more information on this credit, see Publication 596, Earned Income Credit.
Form 8938, Statement of Specified Foreign Financial Assets. If you have specified foreign financial assets in foreign jurisdictions valued above certain threshold dollar amounts, you
may have to file Form 8938, Statement of Specified Foreign Financial Assets, when you file your U.S. income tax return with
the IRS. If you are required to file Form 8938, you do not have to report certain specified foreign financial assets on Form
8938. See Bona fide resident of a U.S. possession, in the Instructions for Form 8938 for more details. For additional details, go to the Foreign Account Tax Compliance Act
(FATCA) page at www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA.
Change of address. If you change your mailing address, use Form 8822, Change of Address, to notify the IRS and U.S. possession tax administration, if appropriate. Mail Form 8822 to the Internal Revenue Service Center or U.S. possession tax administration for your old address (addresses for the Service Centers are on the back of the form).If you change your address before filing your tax return, write the new address in the appropriate boxes of your tax return when you file.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
The Commonwealth of Puerto Rico (Puerto Rico).
The Commonwealth of the Northern Mariana Islands (CNMI).
The U.S. Virgin Islands (USVI).
Unless stated otherwise, when the term “possession” is used in this publication, it includes the Commonwealths of Puerto Rico and the Northern Mariana Islands.
Chapter 1 discusses the requirements for being considered a bona fide resident of the listed possessions.
Chapter 2 gives the rules for determining if your income is from sources within, or effectively connected with a trade or business in, those possessions.
Next, chapter 3 looks at the rules for filing tax returns when you receive income from any of these possessions. You may have to file a U.S. tax return only, a possession tax return only, or both returns. This generally depends on whether you are a bona fide resident of the possession. In some cases, you may have to file a U.S. return, but will be able to exclude income earned in a possession from U.S. tax. You can find illustrated examples of some of the additional forms required in chapter 5 .
If you are not a bona fide resident of one of the possessions listed earlier, or are otherwise required to file a U.S. income tax return, the information in chapter 4 will tell you how to file your U.S. tax return. This information also applies if you have income from U.S. insular areas other than the five possessions listed earlier because that income will not qualify for any of the exclusions or other benefits discussed in chapter 3 . These other U.S. insular areas include:
Palmyra Atoll, and
Internal Revenue Service
Philadelphia, PA 19255-0725
If you need additional information on your tax obligations in a U.S. possession, write to the tax department of that possession. Their addresses are provided in chapter 3 under the individual headings for each possession.
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
You can get the necessary possession tax forms at the tax office for the appropriate possession. The office addresses are given in chapter 3.
54 Tax Guide for U.S. Citizens and Resident Aliens Abroad
514 Foreign Tax Credit for Individuals
519 U.S. Tax Guide for Aliens
Form (and Instructions)
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)
1040-SS U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico)
1116 Foreign Tax Credit
4563 Exclusion of Income for Bona Fide Residents of American Samoa
4868 Application for Automatic Extension of Time To File U.S. Individual Income Tax Return
5074 Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)
8938 Statement of Specified Foreign Financial Assets
8689 Allocation of Individual Income Tax to the U.S. Virgin Islands
8898 Statement for Individuals Who Begin or End Bona Fide Residence In a U.S. Possession
8959 Additional Medicare Tax
8960 Net Investment Income Tax—Individuals, Estates, and Trusts
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