Puerto Rico Income Tax Calculator

Puerto Rico’s individual income tax rates vary from 0% for the lowest income bracket to 33% for the highest bracket. Non-residents pay a flat rate of 29% on Puerto Rican-sourced income. Tax laws and rates may change, so it’s essential to verify the current rates with the Puerto Rico Department of Treasury or a tax professional.

Taxable Income (Annually)	Tax Rate
$0 - $9,000	0%
$9,001 - $25,000	7%
$25,001 - $41,500	14%
$41,501 - $61,500	25%
$61,501 and above	33%

FAQs

How much income tax do you pay in Puerto Rico? Puerto Rico has its own tax system separate from the U.S. federal income tax system. The tax rates in Puerto Rico can vary, but as of my last knowledge update in September 2021, they are generally lower than in many U.S. states. The exact amount you'll pay depends on your income, filing status, and various deductions and credits.

Is Puerto Rico a tax haven? Puerto Rico has been marketed as a tax-friendly destination for U.S. citizens due to its unique tax incentives for residents and businesses. While it's not a traditional tax haven like some offshore jurisdictions, it does offer certain tax advantages that make it attractive to certain individuals and corporations.

What is the income tax rate for non-residents in Puerto Rico? Non-residents of Puerto Rico are subject to a flat income tax rate of 29% on income sourced in Puerto Rico. This includes income earned from Puerto Rican sources while not being a bona fide resident of Puerto Rico.

What is taxation in Puerto Rico? Taxation in Puerto Rico is governed by its own tax code, separate from the U.S. federal tax code. The island has various taxes, including income tax, sales tax, property tax, and others. Tax rates and regulations may change over time, so it's important to consult with a tax professional or the Puerto Rico Department of Treasury for the most up-to-date information.

What taxes do I pay if I live in Puerto Rico? If you live in Puerto Rico as a bona fide resident, you may benefit from lower income tax rates, and some types of income may be exempt from federal income tax. You would still pay Puerto Rican income tax, property tax, and other local taxes.

Is Puerto Rico tax-friendly? For certain individuals and businesses, Puerto Rico's tax incentives can be very advantageous. These incentives include low tax rates on certain types of income and exemptions from certain federal taxes. However, the tax benefits can vary depending on individual circumstances.

Why are millionaires moving to Puerto Rico? Some high-net-worth individuals have been drawn to Puerto Rico due to its tax incentives, which can result in significant tax savings on certain types of income, such as capital gains and dividends.

Is it worth moving to Puerto Rico to avoid taxes? Moving to Puerto Rico solely for tax purposes is a complex decision that depends on various factors, including your financial situation and lifestyle preferences. It's essential to consult with financial advisors and tax professionals to determine if it's a suitable option for you.

Can you live tax-free in Puerto Rico? While you can enjoy certain tax advantages in Puerto Rico, it's unlikely to be entirely tax-free. You may still be subject to local taxes, including income and property taxes, depending on your circumstances.

Is Puerto Rico income foreign income? For U.S. federal tax purposes, income earned in Puerto Rico by bona fide residents is generally treated as domestic income, not foreign income.

Can I buy a house in Puerto Rico and not pay taxes? Property taxes are applicable in Puerto Rico, but the rates can vary by municipality. While you can buy property in Puerto Rico, you will be responsible for paying property taxes based on the assessed value of your property.

What taxes don't Puerto Ricans pay? Puerto Ricans are generally exempt from paying U.S. federal income taxes on income earned in Puerto Rico. However, they do pay local taxes, including income tax, property tax, and sales tax.

What is a good salary in Puerto Rico? Salaries in Puerto Rico vary widely by industry and location. A good salary in Puerto Rico would depend on your profession, experience, and cost of living in the area. As of my last update in 2021, the median household income in Puerto Rico was lower than in many U.S. states.

Is living in Puerto Rico cheap? The cost of living in Puerto Rico can be lower than in many mainland U.S. states, but it varies by location. Some expenses, like housing, may be more affordable, while others, like electricity, can be relatively expensive due to the island's reliance on imported oil for energy.

How do I become a resident of Puerto Rico? To become a bona fide resident of Puerto Rico for tax purposes, you must meet specific requirements outlined by the Puerto Rico Department of Treasury. These requirements include physical presence and intention to establish residency in Puerto Rico.

Do you pay house taxes in Puerto Rico? Yes, property taxes are levied in Puerto Rico. The rates can vary by municipality, and property owners are responsible for paying these taxes annually.

Is Puerto Rico a good place to retire? Puerto Rico can be an attractive retirement destination for some people due to its climate, culture, and tax incentives. However, it's essential to consider factors like healthcare, infrastructure, and personal preferences when deciding if it's a good place for retirement.

What is Law 60 in Puerto Rico? Law 60 in Puerto Rico refers to the Tourism Development Act, which provides tax incentives to promote tourism-related businesses and investments in Puerto Rico.

How expensive is Puerto Rico to live? The cost of living in Puerto Rico can vary widely depending on your lifestyle and location on the island. Some areas are more affordable than others, and expenses like housing, utilities, and groceries can differ significantly.

Are Puerto Ricans U.S. citizens? Yes, Puerto Ricans are U.S. citizens by birthright. Puerto Rico is an unincorporated territory of the United States, and its residents are U.S. citizens.

How safe is it to live in Puerto Rico? Safety in Puerto Rico can vary by location, but like any place, it's essential to exercise caution and be aware of your surroundings. Some areas may have higher crime rates than others, so research and local knowledge are valuable for ensuring personal safety.

What is a high income in Puerto Rico? What constitutes a high income in Puerto Rico depends on various factors, including your lifestyle and expenses. High income in Puerto Rico may be defined differently than in more expensive U.S. states.

Is buying a house in Puerto Rico a good investment? The decision to buy a house in Puerto Rico, like anywhere else, depends on factors such as your financial situation, long-term goals, and the real estate market at the time. Consult with real estate experts to assess whether it's a good investment for you.

Can foreigners buy property in Puerto Rico? Yes, foreigners can buy property in Puerto Rico without any restrictions. The process is generally similar to buying property in the mainland United States.

How do I pay zero tax in Puerto Rico? Paying zero tax in Puerto Rico is generally not possible, as there are local taxes that apply to residents. However, you can take advantage of tax incentives available to bona fide residents to reduce your tax liability.

What is Law 22 in Puerto Rico? Law 22 in Puerto Rico refers to the Individual Investors Act, which offers tax incentives to attract new residents and investors to Puerto Rico.

What are the cons of moving to Puerto Rico? Some potential cons of moving to Puerto Rico include concerns about healthcare quality, infrastructure challenges, and the potential for natural disasters like hurricanes. Additionally, cultural and language differences may pose challenges for some newcomers.

Are property taxes high in Puerto Rico? Property tax rates in Puerto Rico can vary by municipality but are generally considered lower than in many U.S. states.

Do people in Puerto Rico speak English? While Spanish is the primary language spoken in Puerto Rico, many residents, especially in urban areas and tourist areas, also speak English to varying degrees.

Why isn't Puerto Rico a US state? Puerto Rico's political status has been a subject of debate for many years. While it is an unincorporated territory of the United States and its residents are U.S. citizens, it has not yet achieved statehood. The political status issue remains complex and is determined by various historical, cultural, and political factors.

Is Puerto Rico considered a foreign bank account? For U.S. tax purposes, financial accounts in Puerto Rico are generally not considered foreign bank accounts because Puerto Rico is an unincorporated territory of the United States. However, you should report financial accounts as required by the IRS.

Why is Puerto Rico a high-income country? Puerto Rico's classification as a high-income country is primarily due to its status as an unincorporated territory of the United States and the relatively higher income levels compared to many other Caribbean and Latin American nations.

Why you should move to Puerto Rico? Reasons for moving to Puerto Rico can include its pleasant climate, cultural richness, tax incentives for certain individuals, and the opportunity to experience a unique blend of American and Caribbean culture.

What is the tax loophole in Puerto Rico? The tax "loophole" in Puerto Rico refers to the tax incentives provided by certain laws, such as Law 22 and Law 60, that attract wealthy individuals, investors, and businesses to establish residency or operations in Puerto Rico to reduce their tax liabilities.

Why is Puerto Rico so cheap? Puerto Rico can be relatively affordable compared to many mainland U.S. states due to factors like lower housing costs, lower labor costs, and a lower cost of living in some areas.

Why is property so expensive in Puerto Rico? Property prices in Puerto Rico can vary widely by location and demand. In popular tourist areas or upscale neighborhoods, property prices can be relatively high, while prices may be more affordable in less densely populated areas.

How do I become a bona fide resident of Puerto Rico? To become a bona fide resident of Puerto Rico for tax purposes, you typically need to meet requirements related to physical presence and intent to establish residency. Consult with tax professionals for guidance on meeting these requirements.

Where should I live in Puerto Rico? The best place to live in Puerto Rico depends on your preferences, such as lifestyle, climate, and proximity to work or amenities. Popular areas for expatriates and newcomers include San Juan, Condado, Old San Juan, and various beachfront communities.