Puerto Rico Income Taxes and Tax Forms

Puerto Rico tax return
Puerto Rico

The Commonwealth of Puerto Rico has its own tax system that uses the United States tax system as a model, but has substantial differences. Since you cannot prepare and file or e-file a Puerto Rico Tax Return on eFile.com or anywhere online, you can contact the Puerto Rico Department of the Treasury for information on how to do this. However, if you need to complete a Federal Income Tax Return, you can do this on eFile.com, but you need to print it, sign it, and mail it to the IRS, since the IRS does not accept e-filed returns with Puerto Rico and other U.S. Territory/Protectorate addresses. Find IRS mailing addresses for your Federal Tax return here. See information on filing state tax returns if you need to file one or more state return. If you want to know basic Puerto Rico tax information, read on.

Filing Puerto Rico & U.S. Tax Returns

Generally, if you are a Puerto Rico bona fide resident, you must file a Puerto Rico tax return. If you are not a bona fide resident of Puerto Rico, you must file both a Puerto Rico tax return and a U.S. tax return. If you are a U.S. citizen or resident alien, but not a bona fide resident, then you must file a Puerto Rico tax return reporting only Puerto Rico income and a U.S. tax return reporting worldwide income. If you are a nonresident alien of United States, but not a bona fide resident of Puerto Rico, then you must file a Puerto Rico tax return reporting Puerto Rico income and a U.S. tax return Form 1040NR. However, if you are a nonresident alien of the United States, but a bona fide Puerto Rico resident, you must file a Puerto Rico tax return, reporting worldwide income but excluding U.S. income. In addition, you must file a U.S. tax return, namely Form 1040, reporting worldwide income, with the exclusion of Puerto Rico income. You tax return will be treated as one of a nonresident alien, meaning you won't be allowed to claim a dependent deduction unless the dependent is a U.S. citizen or national. If you need to add or change any information to your Puerto Rico return after Puerto Rico accepts it, find out how to prepare, file a U.S. Territory Tax Amendment.

If you are a U.S. citizen or a resident alien, in addition to filing a Puerto Rico tax return that reports all your worldwide income except your U.S. income, you must prepare and e-file a 2019 U.S. tax return reporting all your worldwide income except your Puerto Rico income. However, if you are a Puerto Rico bona fide resident during the entire year, you are generally not required to file an IRS Federal Tax Return if your only income is from Puerto Rico. Find out if you need to file a U.S. tax return. On your U.S. tax return, you will not be able to claim any tax credits or tax deductions that are either directly or indirectly linked to the excluded income. You can prepare your U.S. Tax Return online by clicking the button below: 

Start United States Federal Tax Return

Once you complete and e-file your tax return, check the status of your United States Federal Tax Refund here if you are expecting a refund. To change or add any information to a Federal Tax Return the IRS accepted, you will need to complete and file an Amended U.S. Tax Return

Puerto Rico Sales Tax

Since Puerto Rico is a commonwealth and an unincorporated territory of the United States, it has a 10.5 sales and use tax rate. Municipal governments also levy a 1% municipal sales and use tax.

The U.S. commonwealth generally has two sales tax holidays per year. The first one is held in January and applies to the purchase of school supplies and uniforms. The second one is held in July and applies to school uniforms, supplies, textbooks and notebooks.

 

 

Other U.S. States, Territories, and Protectorates.