Get Publication 4695 (PR). VITA/TCE Puerto Rico Volunteer Test

The Tax Home or Abode (Residence) Test Typically, you live in your tax home, and therefore, this minor distinction is not relevant. But if you travel a lot on business/pleasure it could be relevant. If your regular or principal place of business, employment or duty post is PR, then that is your Tax Home.

The physical presence test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad, it is the Physical Presence Day and you must earn income while you are in Puerto Rico. A full day is a period of 24 consecutive hours starting at midnight.

While the Commonwealth government has its own tax laws, Puerto Rico residents are also required to pay US federal taxes, but most residents do not have to pay the federal personal income tax.

The substantial presence test is a calculation of the number of days an individual has been physically present in the U.S. or Puerto Rico during a period of three calendar years. As a Puerto Rico resident, the approach to the Substantial Present Test is ascertaining that you are not a US Resident for tax purposes.

Closer Connection Test – a facts and circumstances test proving the individual has an aggregate closer connection to Puerto Rico than to the U.S. or any other foreign country.

The term 'resident individual' means an individual who is domiciled in Puerto Rico. It should be presumed that an individual is a resident of Puerto Rico if they have been present in Puerto Rico for a period of 183 days during the calendar year.

The Presence Test is also satisfied if the taxpayer: (i) is present in Puerto Rico for at least 549 days during the three-year period ending with the current taxable year and for at least 60 days during each of the three years, (ii) is present in the United States for no more than 90 days during the year, (iii) is ...

Employers in Puerto Rico are subject to the taxes imposed by the Federal Insurance Contributions Act (FICA) (Social Security and Medicare taxes) and the Federal Unemployment Tax Act (FUTA). An employer is a person or organization for whom a worker performs services as an employee.