Q. I am moving to Puerto Rico permanently, but will retain my U.S. citizenship. Do I have to pay U.S. income tax on my wages? Y.S., Albany, N.Y.
A. It depends. A U.S. citizen who resides in Puerto Rico full time can exclude tax on wages received from employment in Puerto Rico. If the citizen moves after being a Puerto Rican resident for at least two years, a partial exclusion is available. However, you still must pay U.S. income tax on wages received for services rendered as a U.S. employee.
Tip: If the exclusion applies, you generally can’t claim any tax credit or deduction attributable to the amount of the excluded income.
- Small Business Tax Deduction Strategies No matches