My husband is doing lineman work in Puerto Rico. They take out a certain amount out of his paycheck-I want to say around 10%. He's worried that he will then again have to pay a US federal tax on the money he earns when he files at the end of the year. Is that the case, or is he safe from double taxing?
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Yes, he will need to pay US taxes on this income as well.
"U.S. citizens and resident aliens who aren't bona fide residents of Puerto Rico during the entire tax year are required to report all income from worldwide sources on their U.S. income tax return." https://www.irs.gov/taxtopics/tc901
However, when filing your taxes, there is a tax credit available for taxes paid to a foreign country. Puerto Rico, even though a US Possession, is still eligible for the tax credit. Foreign Tax Credit US Possessions
To take the Foreign Tax Credit in TurboTax do the following:
Yes, he will need to pay US taxes on this income as well.
"U.S. citizens and resident aliens who aren't bona fide residents of Puerto Rico during the entire tax year are required to report all income from worldwide sources on their U.S. income tax return." https://www.irs.gov/taxtopics/tc901
However, when filing your taxes, there is a tax credit available for taxes paid to a foreign country. Puerto Rico, even though a US Possession, is still eligible for the tax credit. Foreign Tax Credit US Possessions
To take the Foreign Tax Credit in TurboTax do the following:
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