W2-PR claiming foreign tax credit and social security taxes

[pr_resident_2023]

I received a W2 PR from my employer for a year where I will not be a bona fide resident of Puerto Rico.

• I've paid local PR tax on this income, in addition to Medicare and Social Security taxes
• I also have foreign income from 1099-DIV

Please let me know if this is correct:

• I should not enter the PR income as a W2 income
• I should enter it under Wages & Income --> Less common income --> Foreign Earned Income and Exclusion --> a statement from my foreign employer (NOT a "regular Form W-2 from my employer") --> no I don't want to exclude my foreign income
• Under Deductions and credits --> Estimates and other taxes paid --> Foreign Taxes --> Form 1116 --> General Category Income (NOT Income re-sourced by treaty, since I have income from RIC on my 1099-DIV) --> Puerto Rico --> No I have foreign taxes paid on other income (including wages) --> HERE do I put just the taxes paid to Puerto Rico, or do I include the social security and medicare taxes as well?

Questions:

1. Is this all I need to do in order to properly file my W2-PR as part of my return? I know I should use the taxes paid number from Hacienda before submitting my final form - but does my deduction get adjusted in anyway?
2. Will the PR income be excluded from my state income taxes (i.e. if I'm a resident of NJ will I have to pay NJ taxes on my foreign income from PR?)

Thank you.

[AmyC]

1. Great job! The PR income and taxes would be entered as you described and the IRS can follow and understand. Your social security and Medicare taxes - those were withheld by your employer since the are US based if I recall correctly. Those numbers go to the respective agencies and you don't need to add them to your return.

2. You said you are not PR resident but I don't think you are returning to NJ either. Here are some things states look at when determining residency from The Tax Book:

• Registering to vote and voting in the new state.
• Purchasing residential property.
• Titling and registering vehicles.
• Paying state income tax to another state
• Notifying the state of previous legal residence/domicile of the change in state of legal residence/domicile.
• Preparing a last will and testament which indicates the new state of legal residence/domicile

As you can see, it is just a question of your intention to return and how you are living.