Reg. § 1.876-1 Alien residents of Puerto Rico, Guam, American Samoa, or the Northern Mariana Islands.
(a) Scope Section and this section apply to any nonresident alien individual who is a bona fide resident of Puerto Rico or of a section possession during the entire taxable year.
(b) In general An individual to whom this section applies is, in accordance with the provisions of section , subject to tax under sections and in generally the same manner as an alien resident of the United States. See and -1. The tax generally is imposed upon the taxable income of such individual, determined in accordance with section and the regulations under that section, from sources both within and without the United States, except for amounts excluded from gross income under the provisions of section or . For determining the form of return to be used by such an individual, see section and the regulations under that section.
(c) Exceptions Though subject to the tax imposed by section , an individual to whom this section applies will nevertheless be treated as a nonresident alien individual for the purpose of many provisions of the Internal Revenue Code (Code) relating to nonresident alien individuals. Thus, for example, such an individual is not allowed the standard deduction (section ); is subject to withholding of tax at source under chapter 3 of the Code (for example, section ); is generally excepted from the collection of income tax at source on wages for services performed in the possession (section ); is not allowed to make a joint return (section ); and, if described in section , must pay his first installment of estimated income tax on or before the 15th day of the 6th month of the taxable year (section and (k)) and must pay his income tax on or before the 15th day of the 6th month following the close of the taxable year (sections and ). In addition, under section , an individual is not allowed a deduction for a dependent who is a resident of the relevant possession unless the dependent is a citizen or national of the United States.
(d) Credits against tax
(1) Certain credits under the Internal Revenue Code are available to any taxpayer subject to the tax imposed by section , including individuals to whom this section applies. For example, except as otherwise provided under section or , the credits provided by the following sections are allowable to the extent provided under such sections against the tax determined in accordance with this section—
(i) Section (relating to the credit for adoption expenses);
(ii) Section (relating to the credit for tax withheld on wages);
(iii) Section (relating to the credit for tax withheld at source on nonresident aliens); and
(iv) Section (relating to the credit for certain uses of gasoline and special fuels).
(2) Certain credits under the Internal Revenue Code are not available to nonresident aliens or are subject to limitations based on such factors as principal place of abode in the United States. For example, the credits provided by the following sections are not allowable against the tax determined in accordance with this section except to the extent otherwise provided under such sections—
(i) Section (relating to the credit for the elderly and disabled);
(ii) Section (relating to the Hope Scholarship and Lifetime Learning Credits); and
(iii) Section (relating to the earned income credit).
(e) Definitions For purposes of this section—
(1) “Bona fide resident” is defined in ; and
(2) “Section possession” is defined in .
(f) Effective/applicability date This section applies to taxable years ending after April 9, 2008.
[T.D. 9391, 73 FR 19358, Apr. 9, 2008]