Living in a U.S. Territory: Bona Fide Residence and Your Tax Returns
Published November 7, 2026
Publication 570 (2025), Tax Guide for Individuals With Income From U.S. Possessions, explains how to treat income from five U.S. territories on your tax returns: American Samoa, Puerto Rico, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, and the U.S. Virgin Islands (USVI). This guide gives the starting point. It is general information. It is not advice about your case.
Start with bona fide residence
The publication says that whether you are a bona fide resident of a territory generally decides which returns you must file. You may have to file a U.S. return only, a territory return only, or both. In some cases, you file a U.S. return but can exclude income earned in the territory from U.S. tax. Chapter 1 of the publication explains the requirements for bona fide residence.
If you became or stopped being a bona fide resident of a territory, you may need to file Form 8898. Its full title is Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory.
Income from the territory
Chapter 2 explains how to decide whether your income is from sources within a territory, or effectively connected with a trade or business there. The publication also covers qualified opportunity zones. It says residents of American Samoa and Puerto Rico report qualifying investments on their U.S. return. Residents of the CNMI, Guam, and the USVI report them on the return they file with their territory tax agency.
The publication also says income from other U.S. insular areas does not qualify for those benefits. Examples include Wake Island and the Midway Islands.
Self-employment tax and the net investment income tax
Bona fide residents of a territory who have self-employment income generally must pay U.S. self-employment tax. That is true even if they have no U.S. income tax filing requirement. The publication lists Form 1040-SS for the self-employment tax return. It notes that the form also includes the additional child tax credit for bona fide residents of Puerto Rico.
The net investment income tax may also apply. The publication says bona fide residents of Puerto Rico and American Samoa who must file a U.S. return can owe this tax if their modified adjusted gross income from non-territory sources is above the threshold. Residents of the CNMI, Guam, and the USVI generally have no federal filing requirement. So the tax does not apply to them directly.
Other rules to check
The publication also covers Additional Medicare Tax, ITIN rules for aliens, and the special rules for U.S. government employees and active duty members of the Armed Forces in some territories. Each has its own section. Read the section that matches your situation.
Earned income credit and child credits
The publication says a bona fide resident of a territory generally cannot claim the earned income credit on a U.S. return. Certain territories may allow bona fide residents to claim it on their territory return. For the additional child tax credit, the publication says a rule has changed for bona fide residents of Puerto Rico. They no longer need three or more qualifying children. The publication says they may be eligible with one or more qualifying children.
Getting help
The publication lists Taxpayer Advocate Service contacts for each territory. The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. If you are not a bona fide resident, or you must file a U.S. return anyway, chapter 4 explains how to file it.
Next steps
Write down the dates you lived in each place during the year, and keep records that show where your home was. Note all your income and its source. Then read chapter 1 and chapter 3 of the publication to see which returns apply. If you became or stopped being a bona fide resident, check whether Form 8898 is due. For the U.S. filing rules that apply to people living outside the country, see our guide to U.S. citizens living abroad.
Sources: Sources: IRS, Publication 570 (2025), Tax Guide for Individuals With Income From U.S. Possessions (https://www.irs.gov/pub/irs-pdf/p570.pdf) This is general information, not advice about your specific return.
