5 ms·

Wait. I though Puerto Ricans were only exempt from federal income tax on Pueto Rican-sourced income.

by zeroer 9y ago

dustinmr 9y ago
Here's a local law where if you meet all the criteria (income made off the island, spend > 180 days per year here, various other criteria), you're exempt from income taxes here. And since you're a resident, all your income is here. Effectively exempting you from federal income taxes. The idea was to attract high net worth individuals to spend money here. Every analysis I've seen says it has worked quite well.
- martinald 9y ago
  Crazy. So if you move to PR but making money from other US based interests you get exempted from US federal income tax, but if you move and work permentantly in say Germany, you still get charged US Federal Income tax?
  - enraged_camel 9y ago
    Here's the relevant IRS rule: https://www.irs.gov/taxtopics/tc902.html https://www.irs.gov/taxtopics/tc902.html
    - dustinmr 9y ago
      The relevant laws in PR are Laws 20 and 22. https://www.the2022actsociety.org https://www.the2022actsociety.org
  - djsumdog 9y ago
    That was my question. The US is one of two countries where US citizens are required to file taxes even if they're not living in the country (the other is Eritrea).
    - dustinmr 9y ago
      If I remember correctly, PR and Guam are the two places in the world where your income is exempt from federal income tax, if you pay local taxes. There are some exceptions to that. It's supposed to give some local autonomy to the taxation process and fiscal management.
  - cr1895 9y ago
    https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/fore... I'm not familiar with the Puerto Rico situation, but elsewhere, some (likely significant) portion of your foreign-earned income may be excluded from your US tax burden. For most people who earn money abroad this means that while you must file taxes, you likely don't pay anything to the US Gov't on foreign-earned income. I find the whole taxation-by-citizenship thing ludicrous and coupled with the separate Foreign Bank Account Reporting for accounts having more than $10k taxes are a headache for Americans living abroad.
- deleted 9y ago
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Wait. I though Puerto Ricans were only exempt from federal income tax on Pueto Rican-sourced income.

by zeroer 9y ago

Wait. I though Puerto Ricans were only exempt from federal income tax on Pueto Rican-sourced income.

Here's a local law where if you meet all the criteria (income made off the island, spend > 180 days per year here, various other criteria), you're exempt from income taxes here. And since you're a resident, all your income is here. Effectively exempting you from federal income taxes. The idea was to attract high net worth individuals to spend money here. Every analysis I've seen says it has worked quite well.

martinald 9y ago
Crazy. So if you move to PR but making money from other US based interests you get exempted from US federal income tax, but if you move and work permentantly in say Germany, you still get charged US Federal Income tax?
- enraged_camel 9y ago
  Here's the relevant IRS rule: https://www.irs.gov/taxtopics/tc902.html https://www.irs.gov/taxtopics/tc902.html
  - dustinmr 9y ago
    The relevant laws in PR are Laws 20 and 22. https://www.the2022actsociety.org https://www.the2022actsociety.org
- djsumdog 9y ago
  That was my question. The US is one of two countries where US citizens are required to file taxes even if they're not living in the country (the other is Eritrea).
  - dustinmr 9y ago
    If I remember correctly, PR and Guam are the two places in the world where your income is exempt from federal income tax, if you pay local taxes. There are some exceptions to that. It's supposed to give some local autonomy to the taxation process and fiscal management.
- cr1895 9y ago
  https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion https://www.irs.gov/individuals/international-taxpayers/fore... I'm not familiar with the Puerto Rico situation, but elsewhere, some (likely significant) portion of your foreign-earned income may be excluded from your US tax burden. For most people who earn money abroad this means that while you must file taxes, you likely don't pay anything to the US Gov't on foreign-earned income. I find the whole taxation-by-citizenship thing ludicrous and coupled with the separate Foreign Bank Account Reporting for accounts having more than $10k taxes are a headache for Americans living abroad.
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