Puerto Rico Bona Fide Resident: Closer Connection

Puerto Rico Bona Fide Resident: Closer Connection

Puerto Rico Bona Fide Resident: Closer Connection

You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to Puerto Rico.You will be considered to have a closer connection to Puerto Rico than to the United States or to a foreign country if you have maintained more significant contacts with Puerto Rico than with the United States or foreign country. In determining if you have maintained more significant contacts with Puerto Rico, the facts and circumstances to be considered include, but are not limited to, the following.

  • Where your permanent home is located.
  • Where your family is located.
  • Where your personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family are located.
  • Where your social, political, cultural, professional, or religious organizations with which you have a current relationship take place.
  • Where your local bank is located. (Local bank is where you usually perform your banking activities.)
  • Where your business activities take place. (Other than those that go into determining your tax home).
  • Your driver’s license jurisdiction.
  • Where you vote.
  • Where the charitable organizations to which you contribute are located.
  • What you state as your country of residence on forms and documents.
  • What you file in official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification.

Your connections to Puerto Rico will be compared to the total of your connections with the United States and foreign countries. Your answers to the questions on Form 8898 will help establish the jurisdiction to which you have a closer connection. Find Form 8898 here.


If you are thinking of applying for an Act 22 tax incentive decree and have a question or comment related to the tax compliance under the Puerto Rico Tax Code and the Internal Revenue Code, feel free to send me an email to the contact information below. Maybe I can help.


Miguel Nicolas Moreda, CPA, CIRA

Miguel Nicolas is the founder of Porto Capital. Prior to working as a financial and restructuring advisor for small and medium-sized businesses, he worked at GFR Media Real Estate Division as Finance Manager. Before that, he worked in the Business Advisory Division at Ernst & Young US, LLP in the United States.

He is holds an undergraduate degree in accounting from the University of Puerto Rico. He also possess graduate degrees from the University of Puerto Rico School of Law and IE Business School in Spain. Miguel is a Certified Public Accountant (CPA) and a Certified Insolvency and Restructuring Advisor (CIRA).

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