Income Tax in Puerto Rico

Author: The Gringo

3 Apr

Here is a quick and dirty explanation on what taxes Puerto Rico residents have to pay.

Since Puerto Rico is a Commonwealth of the United States, tax laws are different. Residents of Puerto Rico don’t pay federal income taxes on Puerto Rican source income. Any income from US sources, including stocks, those who work for the Federal Government, etc. must pay federal income. PR residents also pay Social Security, federal payroll, registration, communication, and Puerto Rico state tax.

If you are earning a US Government earned income. You won’t have to pay too much. You have to fill out the IRS form 1116 for the credit.

I have tried to get the usual TurboTax and Taxcut to work with the federal taxes for PR residents, I couldn’t figure them out to well. If anyone has any tricks let me know

I am of course am not a CPA or even good at math :-P So don’t take my word on taxes. Hire a pro!

Filed under: Money

Tags: federal goverment, federal income taxes, form 1116, income tax, puerto rico residents, state tax

3 Responses for "Income Tax in Puerto Rico"

» Income Tax in Puerto Rico April 3rd, 2008 at 5:46 am 1
[…] Jan Norman on Small Business - OCRegister.com wrote an interesting post today onHere’s a quick excerptIncome Tax in Puerto Rico Author: The Gringo 3 Apr Here is a quick and dirty explanation on what taxes Puerto Rico residents have to pay. Since Puerto Rico is a Commonwealth of the United States, tax laws are different. Residents of Puerto Rico don’t pay federal income taxes on Puerto Rican source income. Any income from US sources, including stocks, those who work for the Federal Government, etc. must pay federal income. PR residents also pay Social Security, federal payroll, reg […]
Rob April 5th, 2008 at 2:37 am 2
For the 2007 tax year, I got away with filing fed and California forms… but no PR. I formally only lived in PR for 4 months in 2007 and had $0 income from PR sources in that time.

But yeah, I had a hell of a time finding an accountant who could do all of those states + federal without doing a PR return. It wasn’t easy. This years taxes are gonna be a bitch come January 2009
Puerto Rico’s Stimulus Plan aka Recovery Rebates gets Approved April 17th, 2008 at 1:14 pm 3
[…] didn’t really pay that much federal tax this year anyway as most Puerto Ricans don’t pay the IRS. So when they say free money, they mean it! I would be interested to hear from people in the […]