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Puerto Rico Tax Filing Guide for Act 60 Residents — 2026

Read this before filing anything

Filing Deadlines: the IRS federal return AND Puerto Rico Hacienda return are both due April 15, 2026.

Act 60 Deadline Alert: Submit your Act 60 application by December 31, 2026 to be grandfathered into the 0% capital gains rate. The submission date — not the approval date — is what determines the rate. Decree processing takes 10–12 months; filing before the deadline locks in the 0% rate even if the decree is issued in 2027.

IRS Audit Warning: The IRS is auditing Act 60 residents right now as well. You must maintain airtight proof of the 183-day physical presence and all closer-connection factors.

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Yes — Puerto Rico may require separate filings. 

One with the IRS. One with Hacienda. 

The IRS still taxes worldwide income unless you qualify as a Puerto Rico bona fide resident under IRC Section 937 . 

The current 2025–2026 IRS audit wave is catching many taxpayers. A professional, dedicated Puerto Rico tax CPA is not a luxury at this point — it would be the optimal cost-effective decision this year.

What is the Physical Presence Test?

Imagine the IRS physical presence test as a strict university laboratory protocol. 

Your Act 60 decree grants you a full-tuition scholarship — yet if the administration checks the entry logs and notices you spent the semester attending a distinct campus on the US mainland, the funding gets revoked. 

You must satisfy the IRS presence test and the related tax-home and closer-connection rules.

Flight itineraries, in-person purchase slips, smartphone geolocation data, and appointment diaries must be produced.

What is the 2026 Act 60 deadline?

Act 60 Compliance Factor

Current Rules — Applying by Dec 31, 2026

New Rules — Applying on/after Jan 1, 2027

Capital Gains Tax Rate

0%

4%

Interest & Dividends Tax

0%

4%

Primary Residence

Acquire within 2 years of decree

Acquire within 2 years — must record in PR Property Registry

In summary: submitting your Act 60 application on or before December 31, 2026 locks in the 0% rate on capital gains, interest, and dividends. Applications submitted on or after January 1, 2027 are subject to a 4% rate on the same income categories under Act 38-2026.

Four percent does not sound alarming. On a USD 10 million capital gain, it is USD 400,000. On USD 50 million? Do the math.

The Act 60 tax incentives that made Puerto Rico attractive are still available — but the window is narrowing. The exact mechanics of the grandfathering clause for part-year residents who relocate in late 2026 but receive official decree approval in early 2027 are still being interpreted.

Managing sourcing rules — IRS Sections 861, 862, 865 and 937

Moving to Puerto Rico does not automatically make income tax-free. 

The income itself must be locally sourced in line with IRC Sections 861, 862, and 865 — with Section 937:

  • establishing the bona fide residency criteria and source rules
  • Section 933 providing the actual income exclusion for qualifying Puerto Rico bona fide residents

Sourcing the capital gains is like planting an apple tree.

If the tree grew its apples in California — pre-move appreciation — California and the IRS get to tax those apples — even if you physically pick them after moving to Puerto Rico. Only the new branches that grow after establishing bona fide residency in PR are protected.

 In plain terms, any asset appreciation that occurred before establishing Puerto Rico bona fide residency remains US-taxable when sold, regardless of when the sale takes place.

Pre-move appreciation follows you. It is permanently tainted. A seasoned Puerto Rico tax CPA can run the sourcing analysis before filing.

Local Puerto Rico compliance — beyond the IRS

Hacienda Portal Reporting

Filing the PR income tax return by April 15. Puerto Rico operates under its own tax code, separate from the IRC.

Sales and Use Tax (SUT) Monthly Filings

Establishments selling goods or taxable services in Puerto Rico must file SUT returns monthly with Hacienda. Late filings naturally generate penalty payments that accumulate fast — and mark the account for closer scrutiny.

Form 480

The Puerto Rico 480 series covers several local information returns and is similar to, but not identical to, federal 1099 reporting.

Patente Municipal — Municipal License

Mandatory for any business operating in Puerto Rico. Each municipality sets its own rate and schedule. Delinquency can directly threaten the Act 60 decree.

CRIM — Property Tax 

If you own real property in PR, CRIM manages assessment and billing. The decree covers a timeline to acquire the primary residence; missing it — or failing to record it in the Property Registry after 2026 — puts the decree itself at risk.

Merchant Registration Certificate — Certificado de Registro de Comerciante 

Necessary before legally selling goods or services in Puerto Rico. Issued by Hacienda — and a prerequisite for the SUT registration.

Annual Report – Department of State

Active PR corporations file annual reports, while LLCs generally pay an annual fee each year. Missing this filing risks administrative dissolution — which directly jeopardizes your Act 60 decree status. Gaps in local filings appear in audits. If the federal return looks clean but the local filings do not — the IRS uses that inconsistency as leverage.

How does a Puerto Rico tax CPA approach a return?

Filing taxes in Puerto Rico means working through:

  • Hacienda’s rules
  • the IRS’s sourcing requirements 
  • Act 60 decree obligations
  • municipal filing deadlines — simultaneously 

We manage them all with zero guesswork. 

Every recurring local obligation listed above — SUT monthly filings, Form 480, Merchant Registration, and Annual Reports to the Department of State — is managed on your behalf, on time — every cycle.

  • Puerto Rico Income Tax Returns — individual and business returns filed with precise reporting aligned to local tax regulations, cross-checked against your federal position
  • Act 60 Advisory — Export Services & Resident Individual Investor — our Puerto Rico tax CPA team reviews decree compliance, maps income to the correct sourcing rules under IRC Section 937, and locks in your position before the 2026 window closes
  • Annual Report Filings – Acts 20/22/60 — decree holders must file annually or risk Hacienda suspending the incentive grant entirely; we handle preparation, submission, and confirmation
  • Payroll Tax Compliance — Puerto Rico payroll rules differ from federal requirements; we manage withholding calculations, filings, and reconciliations for both Hacienda and the Department of Labor
  • Bookkeeping Services — ledger maintenance, balance sheets, and P&L statements built to the standards Puerto Rico tax filings and Act 60 annual reports actually require
  • Audit Defense — our team prepares physical presence documentation, sourcing analysis, and written IRS responses before examiners escalate, leveraging our specialized expat tax services so you stay compliant without the scramble
  • Tax Planning and Consulting — year-round, not just April; we review decree compliance, confirm the 183-day residency requirement is documented, and position capital gains correctly before you sell

Dimov Tax is ready to work with you

You moved to Puerto Rico because the tax structure made sense. 

Don’t let documentation failures or sourcing errors or missed municipal deadlines hand that money back to the IRS.

The audit wave is not slowing down. The December 31, 2026 Act 60 deadline is not moving. The Hacienda return is due the same day as the federal one.

Contact Dimov Tax — your dedicated Puerto Rico tax CPA firm — at (866) 675-1367.

The best time to get your filings right was last year. The second-best time is today.

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Common Questions Answered

It depends on whether your employer is a US entity or a Puerto Rico entity — the source of the wages determines the federal filing obligation — even if you’re a bona fide resident.

Only gains that accrue after establishing bona fide residency are protected — crypto held before the move date carries pre-residency appreciation that remains US-taxable when sold.

Yes — Hacienda can suspend or revoke a decree for delinquent local obligations like a missed Patente Municipal or Annual Report — independent of the federal compliance status.

Yes — US citizens who begin or end bona fide residency in Puerto Rico must generally file Form 8898 with the IRS in the year the change occurs.

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