A U.S. citizen or foreign individual may be considered a bona fide resident of Puerto Rico if they satisfy the presence test (183 days or more during a calendar year). Various considerations must be analyzed before making a determination.

Residents of Puerto Rico are generally required to file a Puerto Rico income tax return on or before April 15. Special income tax filing rules may apply based on the source of income.

The maximum individual income tax rate is 33%. Puerto Rico individual income taxes are filed in Form 482. Starting in 2020, a significant class of expenses are considered non-deductible if not reported on annual informative returns primarily to vendors, suppliers, and service providers for both sole proprietorships and entities.

A Federal income tax return is required in certain cases. For example, residents of Puerto Rico who are not required to file a U.S. income tax return must file Form 1040-SS or Form 1040-PR with the United States to report self-employment income and pay self-employment tax, if necessary.

A bona fide resident of Puerto Rico generally is not required to file a U.S. federal income tax return if the only income is from sources within Puerto Rico. A bona fide resident of Puerto Rico with income from sources outside of Puerto Rico is required to file a U.S. federal income tax return if such amount is above the U.S. filing threshold. Nevertheless, a bona fide resident of Puerto Rico with a U.S. filing obligation generally will not report Puerto Rico source income on a U.S. income tax return.

However, a bona fide resident of Puerto Rico who is a U.S. government employee must file a U.S. income tax return reporting all income received for performing services for the U.S. government, including services performed in Puerto Rico as a U.S. government employee. Special income tax filing rules may apply to members of the U.S. Armed Forces or a civilian spouse of an active-duty member of the U.S. Armed Forces.

Residents of Puerto Rico must also file Forms 1040-SS or Form 1040-PR to claim the Child Tax Credit (CTC) for their qualifying children. Claiming CTC is subject to eligibility requirements and certain limitations, such as income earned by children, defined as qualifying relatives.