Income Reporting from U.S. Possessions
U.S. Government employees
Answer:
Wages and cost-of-living allowances paid by the U.S. Government or one of its agencies for working in Puerto Rico are subject to Puerto Rican tax. The cost-of-living allowances are excluded from Puerto Rican Gross income up to the exempt from U.S. tax.
These wages are also subject to U.S. tax but the cost-of living allowances are excludable. A foreign tax credit is available in order to ovoid double taxation.
These wages are also subject to U.S. tax but the cost-of living allowances are excludable. A foreign tax credit is available in order to ovoid double taxation.
