According to the IRS, to be considered a bona fide resident of Puerto Rico, you must meet the following criteria:
- Physical presence: You must be physically present in Puerto Rico for at least 183 days during the tax year.
- Tax home: Your tax home must be in Puerto Rico. This means that your principal place of employment must be in Puerto Rico, or you must have a closer connection to Puerto Rico than to any other state.
- Domicile: Your domicile must be in Puerto Rico. This means that you must intend to make Puerto Rico your permanent home.
If you meet all of these criteria, you will be considered a bona fide resident of Puerto Rico for tax purposes. This means that you will be subject to Puerto Rican income tax on your worldwide income, but you will not be subject to U.S. income tax on your Puerto Rican source income.
Here are some additional things to keep in mind about becoming a bona fide resident of Puerto Rico:
- The IRS may consider other factors in determining whether you are a bona fide resident of Puerto Rico. These factors may include your family ties, your social ties, and your business ties.
- If you are unsure whether you meet the criteria to be considered a bona fide resident of Puerto Rico, you should consult with a tax advisor.
Here are some of the actions you can take to establish yourself as a bona fide resident of Puerto Rico:
- Get a Puerto Rican driver’s license and ID card.
- Open a bank account in Puerto Rico.
- Vote in Puerto Rican elections.
- Purchase a home in Puerto Rico.
- Join Puerto Rican clubs and organizations.
- Get involved in Puerto Rican community activities.
By taking these steps, you can demonstrate to the IRS that you have a bona fide connection to Puerto Rico and that you intend to make it your permanent home.
If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process.
I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985.
Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.