If you're a bona fide resident of Puerto Rico, you'll be able to exclude income from Puerto Rican sources on your U.S. income tax return. However, this exemption from U.S. income taxation doesn't apply to amounts you receive for services performed as an employee of the United States or any agency thereof. If you're a bona fide resident and have to file a U.S. income tax return, then you can claim deductions and credits that are allocable to or chargeable against income required to be reported on your U.S. income tax return. You can't claim deductions and credits allocable to or chargeable against Puerto Rican source income that you excluded on your U.S. income tax return. In addition, you can claim deductions and credits that aren't specifically attributable to income from either Puerto Rican or non-Puerto Rican sources, but you must allocate such deductions and credits between income from Puerto Rican sources and income from all other sources (worldwide) to find the part that you can claim on your U.S. income tax return. Examples of these types of allocable deductions and credits are the standard deduction and certain itemized deductions such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your personal residence. If you must report income from Puerto Rican sources on your U.S. income tax return, then you can claim a foreign tax credit for income taxes paid to Puerto Rico on the same income. To calculate your foreign tax credit, you must reduce the income taxes paid to Puerto Rico by any amount of income taxes allocable to excluded Puerto Rican source income. When claiming a foreign tax credit, you must complete Form 1116, Foreign Tax Credit. See Topic No. 856 for more information about the foreign tax credit. For more information about how to allocate deductions and credits with respect to excluded income as well as how to determine if you're a bona fide resident, refer to Topic No. 901, Publication 570, and Publication 1321 PDF.