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Form 4563 - Exclusion of Income for Bona Fide Residents of American Samoa

If you're living and working in American Samoa, you may be eligible for a significant tax benefit that many residents aren't aware of. Form 4563 allows bona fide residents of American Samoa to exclude certain income from their federal tax return. Here's what you need to know.

What is Form 4563?

Form 4563, "Exclusion of Income for Bona Fide Residents of American Samoa" is an IRS form that lets qualifying individuals exclude income earned in American Samoa from their gross income on Form 1040 or 1040-SR. This can result in substantial tax savings if you meet the requirements.

Who Qualifies for This Exclusion?

To qualify for the American Samoa income exclusion, you must meet specific criteria:

You must be a bona fide resident of American Samoa for the entire tax year. This means you've established your home there and intend to remain indefinitely, not just temporarily.

Your income must come from American Samoa sources. This includes:

  • Wages, salaries, and tips earned for work performed in American Samoa
  • Interest from American Samoa financial institutions
  • Dividends from corporations organized in American Samoa
  • Business income from American Samoa operations
  • Rental income from American Samoa property
  • Capital gains from American Samoa real estate

How to Complete Form 4563

The form is divided into two main parts:

Part I: General Information

You'll need to provide details about your residency including:

  • When your bona fide residence began and ended
  • Your living arrangements (rented, purchased, employer-provided)
  • Family members living with you
  • Any homes maintained outside American Samoa
  • Days you were absent from American Samoa during the year

Part II: Figure Your Exclusion

Here you'll calculate the total income eligible for exclusion by listing:

  • Wages and salaries from American Samoa work
  • Interest and dividends from American Samoa sources
  • Business and farm income earned in the territory
  • Rental income from American Samoa property
  • Capital gains from American Samoa assets
  • Other qualifying income

The total from line 15 represents the amount you can exclude from your gross income.

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