"Am I a Puerto Rico resident for tax purposes?" sounds like a simple question, but it has two answers: one from Hacienda (the Departamento de Hacienda, Puerto Rico's Treasury Department) and one from the IRS. Each agency uses its own rules, and you can be a resident for one and not the other in the same year. The answer determines which income is taxed, where you file, and whether you can use benefits such as the federal exclusion for Puerto Rico income or an Act 60 (Ley 60) decree. If you're planning a move, see also moving to or from Puerto Rico.
Residency for Hacienda
The general rule
Under the 2011 Código de Rentas Internas (Internal Revenue Code of Puerto Rico), Section 1010.01(a)(30), and Hacienda's 2025 instruction booklet:
- An individual is a resident of Puerto Rico if they're domiciled here. Domicile depends on the facts and circumstances of each case: where your permanent home is and where you intend to return.
- You're presumed to be a resident if you were present in Puerto Rico for 183 days during the calendar year.
- That presumption can be rebutted. If your stay is merely temporary and you meet other criteria, you may not be a resident even if you were here 183 days or more. In that case, the return lets you indicate that you were not a resident for the whole year.
What a resident and a nonresident pay tax on
Resident. Pays Puerto Rico tax on income from all sources, here and abroad. If you paid tax to the United States, a state or another country on income that is also taxed here, you can claim a credit on Schedule C Individual, which we explain in tax credits.
Nonresident U.S. citizen. Pays tax only on Puerto Rico-source income, using the regular rate table. Income from outside Puerto Rico is reported on the return to figure certain deduction limits, but it's not taxed here.
Nonresident alien. If not engaged in a trade or business in Puerto Rico, their Puerto Rico-source income is taxed at a flat 29% rate (15% on dividends), according to the 2025 booklet.
The year you move
The booklet explains how to report the year of the change:
- If you move to Puerto Rico, you report all income you received from the date you changed your residence through the end of the year, plus any Puerto Rico-source income you received while you were a nonresident. Income from outside Puerto Rico for the nonresident period is not taxed here.
- If you leave Puerto Rico, you report all your income up to the date your residence changed, regardless of source, plus any Puerto Rico-source income you receive afterward.
In the heading of the income tax return (planilla, Form 482), you enter the date of your move and, in question C, the income earned before or after your residence period. Deductions are prorated based on your residence period (Part II of Schedule A Individual).
Raúl lived in Orlando and moved to Puerto Rico on July 1, 2025, to stay. His 2025 Puerto Rico return includes everything he earned from July 1 on, from any source, plus any Puerto Rico-source income from January through June (for example, rent from an apartment he already owned here). His Orlando salary from January through June is not taxed in Puerto Rico, but he reports it in question C.
Bona fide residence for the IRS
Why it matters
Section 933 of the federal Internal Revenue Code lets a bona fide resident of Puerto Rico exclude Puerto Rico-source income from federal income. That's why most residents don't file a federal income tax return for their income from here. The exclusion doesn't apply to income from sources outside Puerto Rico or to wages the federal government pays its employees, and it doesn't relieve you of self-employment tax (Social Security and Medicare). See Puerto Rico residents and the IRS.
The three Section 937 tests
According to IRS Publication 570 (2025), you're a bona fide resident of Puerto Rico for a year if you meet all three tests:
1. Presence test. You only need to meet one of these conditions:
- you were in Puerto Rico at least 183 days during the year;
- you were there at least 549 days during the three-year period made up of the current year and the two prior years, with at least 60 days in each year;
- you were in the United States no more than 90 days during the year;
- you had no more than $3,000 of U.S. earned income and spent more days in Puerto Rico than in the United States; or
- you had no significant connection to the United States during the year (according to Publication 570, you have one if, for example, you have a permanent home there, you're registered to vote there, or your spouse or a child under 18 has their main home there, with certain exceptions).
Some days count as presence in Puerto Rico even when you're away, for example certain days for medical treatment, declared disasters or mandatory evacuations, and in some cases up to 30 days of travel outside both Puerto Rico and the United States.
2. Tax home test. During the year, your tax home, meaning your main place of work or business, can't be outside Puerto Rico.
3. Closer connection test. During the year, you can't have a closer connection to the United States or a foreign country than to Puerto Rico. The IRS looks at, among other things, where your permanent home, family, cars and belongings, and bank accounts are, as well as your driver's license, where you vote and which organizations you belong to.
Publication 570 has special rules for the year you move. Under certain conditions, they let you meet the tax home and closer connection tests even if you lived elsewhere for part of the year.
Form 8898
According to Publication 570, you must file Form 8898 with the IRS for the year you become or stop being a bona fide resident of Puerto Rico if your worldwide gross income for that year is more than $75,000. If you don't file it, or you file it incomplete or with incorrect information, you can face a $1,000 penalty. Part III of the form helps document your closer connection.
Hacienda and the IRS don't always agree
| Hacienda | IRS | |
|---|---|---|
| Main criterion | Domicile | Three tests (presence, tax home, closer connection) |
| Day-count presumption | 183 days (rebuttable) | 183 days is one of several ways to pass the presence test |
| Result | You pay tax here on all your income | You exclude your Puerto Rico-source income from your federal return |
For example, someone who moves in November can be a resident for Hacienda from the day they arrive and still not meet the IRS presence test that year. In years like that, it's common to have to file in both systems and use credits for taxes paid to avoid double taxation. Read moving to or from Puerto Rico.
Residency and Act 60 decrees
Act 60 Resident Individual Investor decrees depend, among other things, on your being a bona fide resident of Puerto Rico. If you have a decree (decreto) or plan to apply for one, documenting your presence and your ties to Puerto Rico is especially important, because the benefit depends on it. See Act 60 guide and Resident Individual Investor.
Frequently asked questions
I spend six months in Puerto Rico and six in New York. Where am I a resident?
It depends on your domicile and, for the IRS, on the three tests. If you spend 183 days or more here, Hacienda presumes you're a resident, but what matters is where your permanent home is and where you intend to return. For the IRS, in addition to presence, your tax home can't be outside Puerto Rico and you can't have a closer connection to the United States. In situations like this, a professional review is a good idea.
If I'm a bona fide resident, do I have nothing to do with the IRS anymore?
Not necessarily. If you're self-employed, you file Form 1040-SS. If you have income from outside Puerto Rico or you're a federal employee, you may have to file Form 1040. And if you have children, you may be able to claim the Child Tax Credit.
What documents help prove my residency?
A log of your days of presence, your lease or deed, your driver's license and vehicle registration, your voter registration, your bank accounts, your membership in local organizations and your Hacienda returns. Part III of Form 8898 covers many of these factors.
I left Puerto Rico in 2025. Do I have to file with Hacienda?
Generally, yes. You report all your income up to the date your residence changed, plus any Puerto Rico-source income you receive afterward. The due date is the same as for residents. See who must file and how to file your return.
Sources
- Departamento de Hacienda, "Folleto de Instrucciones, Planilla de Contribución sobre Ingresos de Individuos 2025" (rev. 27 de febrero de 2026). hacienda.pr.gov
- Internal Revenue Service, "Publication 570 (2025), Tax Guide for Individuals With Income From U.S. Territories". irs.gov
- Oficina de Gerencia y Presupuesto, "Puerto Rico Internal Revenue Code of 2011, as amended", compilación rev. 18 de junio de 2026, Sección 1010.01(a)(30). bvirtualogp.pr.gov
787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.
