J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

36.10 Earnings in Puerto Rico

If you are a U.S. citizen who is also a resident of Puerto Rico for the entire year, you generally report all of your income on your Puerto Rico tax return. Where you report income from U.S. sources on the Puerto Rico tax return, a credit against the Puerto Rico tax may be claimed for income taxes paid to the United States.

If you are not a resident of Puerto Rico, you report on a Puerto Rico return only income from Puerto Rican sources. Wages earned for services performed in Puerto Rico for the U.S. government or for private employers are treated as income from Puerto Rican sources.

U.S. tax returns.

As a U.S. citizen, you must file a U.S. tax return reporting income from all sources. But if you are a bona fide resident of Puerto Rico for an entire tax year, you do not report on a U.S. tax return any income earned in Puerto Rico during your residence there, except amounts received for services performed in Puerto Rico as an employee of the U.S. government. Similar rules apply if you have been a bona fide resident of Puerto Rico for at least two years before changing your residence from Puerto Rico. On a U.S. tax return, you may not deduct expenses or claim tax credits allocable to the excludable income. Personal exemptions are fully deductible.

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Information for Puerto Rico Filing

Information on Puerto Rico tax ...