IRS Form 8898 for Puerto Rico Residents
As a new resident of Puerto Rico you will need to inform the IRS of your move and becoming a bona fide resident of the territory. This is done with IRS Form 8898 and includes a range of questions about your move and income.
When do I need to complete this form?
- The first tax year of your move
- For example, if you moved to Puerto Rico in September 2015 and therefore weren’t a bona fide resident for 2015, your first tax year will be 2016.
- If you moved in March 2016 and met all the requirements for bona fide residency, 2016 would be your first tax year.
- If you have a gross income of $75,000 or more (if married, this applies to each spouse separately)
- If you cease to be a resident of Puerto Rico and move back to the states.
- Submit the completed form before the 1040 due date (typically April 15th). Send the form to:
Department of the Treasury
Internal Revenue Service Center
Philadelphia, PA 19255-0549
Will my CPA do this for me?
If you’ve hired a local Puerto Rican CPA to do your taxes they will most likely include this form as well. However, it’s worth asking them to be sure and discussing some of the questions that they may not have the information for, such as the number of days of presence in PR & US, the banks you use, etc. This is important information that establishes your closer connection to Puerto Rico so it’s a good idea to review thoroughly with your CPA before submitting.
What happens if I don’t file?
The IRS may impose a penalty of $1,000 if you do not file Form 8898 for the tax year of your move. As well, with proposed changes to Act 20/22 (as of Q1 2017), your tax decree may also have a requirement to submit this form and not doing so may jeopardize your tax incentive. (More information about proposed changes. Note: until laws are revised this is not a requirement of your decree but is still an IRS requirement)
Links to IRS form and instructions: