Topic 856 – Foreign Tax Credit
The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.

Qualifying Tests for the Credit
The tax must meet four tests to qualify for the credit:

The tax must be a…[Read more]

Topic 857 – Individual Taxpayer Identification Number (ITIN)
A taxpayer identification number (TIN) is required on all returns, statements, and other tax-related documents and you must provide it upon request to any other person who needs it to comply with the tax law. For most individuals, their TIN is a social security number (SSN). A foreign…[Read more]

Topic 858 – Alien Tax Clearance
If you’re a resident or a nonresident alien departing the United States, you usually have to show that you have complied with the U.S. income tax laws before you can depart. You do this by obtaining from the IRS a tax clearance document, commonly called a departure permit or sailing permit.

Not Required to Obtain…[Read more]

Topic 901 – Is a Person With Income From Puerto Rico Required to File a U.S. Federal Income Tax Return?
If you’re a bona fide resident of Puerto Rico during the entire tax year, you generally aren’t required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico. However, if you also have income from…[Read more]

Topic 902 – Credits and Deductions for Taxpayers with Puerto Rican Source Income Exempt from U.S. Tax
If you’re a bona fide resident of Puerto Rico, you’ll be able to exclude income from Puerto Rican sources on your U.S. income tax return. If you’re also a federal employee, the income you derive from that employment is deemed U.S. sourced for U.S.…[Read more]

Topic 903 – U.S. Employment Tax in Puerto Rico
Employers in Puerto Rico are subject to the taxes imposed by the Federal Insurance Contributions Act (FICA) (social security and Medicare taxes) and the Federal Unemployment Tax Act (FUTA). An employer is a person or organization for whom a worker performs services as an employee. As an employer,…[Read more]

Topic 904 – Tax Assistance for Residents of Puerto Rico
VITA – The Internal Revenue Service sponsors the Volunteer Income Tax Assistance Program (VITA) and offers free help to taxpayers in several of its offices in convenient community locations. VITA is a program in which the IRS trains volunteers to assist taxpayers in community locations to…[Read more]