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People also ask
Is Puerto Rico exempt from federal taxes?U.S. citizens who have lived all year on the island are exempt from filing taxes to the federal government of the United States as long as all of your income was from Puerto Rican sources only.
What taxes do you pay in Puerto Rico?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).
Is Puerto Rico tax exempt?By becoming a bona fide resident of Puerto Rico, you will no longer be subject to US federal income tax on your Puerto Rico source income as you are now subject to Puerto Rican income tax laws. This, of course, is the main draw of both programs.
Do you pay federal income tax in Puerto Rico?Residents also pay federal payroll taxes, such as Social Security and Medicare taxes. Only certain residents of Puerto Rico are required to file federal income tax forms. ... Bona fide residents of Puerto Rico generally do not report income received from sources within Puerto Rico on their U.S. income tax return.
Is Puerto Rico income taxable?However, Puerto Rico is not a US state. Because of this, only Puerto Rican residents who are government employees, and those with income sources outside of the territory, pay federal income tax. All other employers and employees pay no federal income taxes.