tax on retirement income (low income, tax, live in)

[tomd63]

I am a bonified resident of PR and have income from 2 small pensions and minimal Social Security. Can anyone give guidance on what tax I must pay and or file in PR?

[mym]

no clue man,

but here is Departamento de Hacienda de Puerto Rico

they have some english forms on the lower right hand side.

if you live in PR you pay PR tax, not federal as far as i know but i am no expert.

[CptnRn]

Interesting question, maybe this will help. Taxation in Puerto Rico - Wikipedia, the free encyclopedia

Only certain Puerto Ricans are required to file federal income tax forms. According to the Internal Revenue Service:
In general, United States citizens and resident aliens who are bona fide residents of Puerto Rico during the entire tax year, which for most individuals is January 1 to December 31, are only required to file a U.S. federal income tax return if they have income sources outside of Puerto Rico or if they are employees of the U.S. government. Bona fide residents of Puerto Rico generally do not report income received from sources within Puerto Rico on their U.S. income tax return. However, they should report all income received from sources outside Puerto Rico on their U.S. income tax return.

[STT Resident]

Another explanation:

"Puerto Rico is classified by the U.S. government as an independent taxation authority by mutual agreement with the U.S. Congress. A common misconception is that residents of Puerto Rico do not have to pay federal taxes. Residents of the island pay federal taxes (import/export taxes, federal commodity taxes, social security taxes, etc.) and some even pay federal income taxes (Puerto Rico residents who are federal employees, or who do business with the federal government, Puerto Rico-based corporations that intend to send funds to the U.S., etc). While most residents of the island do not pay federal income tax, they do pay federal payroll taxes (Social Security and Medicare), as well as Puerto Rico income taxes. In addition, because the cutoff point for income taxation is lower than that of the IRS code, and because the per-capita income in Puerto Rico is much lower than the average per-capita income on the mainland, more Puerto Rico residents pay income taxes to the local taxation authority than if the IRS code were applied to the island. Puerto Rico residents are eligible for Social Security benefits upon retirement. Puerto Rico is excluded from Supplemental Security Income (SSI). Puerto Rico receives less than 15% of the Medicaid funding it would be allotted as a state."

[Sunscape]

If you read the posts from the other forum members and from the Wiki link, it's complicated. It depends on where your pension comes from and what kind of income is the one you have.

If you get a tax software it works around this with you, if not then it's probably good to have a tax preparer work on this.

I don't know if this is in PR, but the IRS does fill out your income tax forms with tax volunteers in the US. This is done for people whose income meets their standarts, which are having a low income.

Do any of the regulars know if the IRS has this program in PR?

[STT Resident]

^^^ I'm guessing that the Departamento de Hacienda offers such assistance, as does the Internal Revenue Bureau in the US Virgin Islands. In the USVI we do use the identical (US) IRS filing forms but they're processed in the USVI and our deal with the federal government is that the taxes are kept in the territory.

[NJtoPR]

I called both the department of Hacienda and an HR Block in Puerto Rico, they both told me that since my pension is from the States (New Jersey) no tax is paid to Puerto Rico, I only have to file with the IRS.