Is Puerto Rico subject to US income tax?
Even though bona fide residents of Puerto Rico do not have to pay federal income taxes on income sourced from Puerto Rico, the situation is different if you are self-employed.
What are income taxes in Puerto Rico?
Personal income tax rates
| Net taxable income (USD) | Tax |
|---|---|
| Not over 9,000 | 0% |
| Over 9,000, but not over 25,000 | 7% of the excess over USD 9,000 |
| Over 25,000, but not over 41,500 | USD 1,120 plus 14% of the excess over USD 25,000 |
| Over 41,500, but not over 61,500 | USD 3,430 plus 25% of the excess over USD 41,500 |
Is Puerto Rico a tax haven for US citizens?
The combination of Act 20 and Act 22 make Puerto Rico a genuine tax haven with Unique tax benefits for US citizens which are not accessible elsewhere.
Can you move to Puerto Rico to avoid taxes?
By moving to Puerto Rico through one of the tax programs – which require you to have NOT lived there in the last fifteen years – you can take advantage of a 4% income tax rate, 0% dividend rate, and 0% capital gains tax rate.
What is the federal income tax rate for Puerto Rico?
The island imposes a separate local Puerto Rico income tax in place of typical U.S. federal income tax. The personal income tax rate in Puerto Rico is up to 33%. This is applicable to regular wages regardless of having an Act 20 or Act 22 decree.
What are the tax laws in Puerto Rico?
The main body of domestic statutory tax law in Puerto Rico is the Internal Revenue Code of Puerto Rico (Spanish: Código de Rentas Internas de Puerto Rico). The code organizes commonwealth laws covering commonwealth income tax, payroll taxes, gift taxes, estate taxes and statutory excise taxes.
Do people in Puerto Rico pay taxes?
Yes, Puerto Ricans do pay some federal income taxes in addition to the local income tax they pay in Puerto Rico. They pay the federal tax that funds Social Security and Medicare (the Federal Insurance Contributions Act (FICA) tax). There are also exceptions to the general rule.
What is the tax form for Puerto Rico?
Forma Corta is the general income tax form for Puerto Rico residents. These Instructions will help you fill out and file Forma Corta. Forma Corta is the general income tax form for Puerto Rico residents.