See what an Act 60 year could look like.

Bona fide Puerto Rico residence is three tests

IRC §937 and IRS Publication 570 require the presence test, a tax home in Puerto Rico, and a closer connection to Puerto Rico than to the United States or a foreign country. Presence can be 183 days, and Publication 570 also lists other presence paths. Meeting a day count alone does not make someone a bona fide resident. The year of the move has its own rules. This sketch is a full year on one side or the other, not the move year.

Export-services income is a decree category, not all business income

Chapter 3 of the Incentives Code taxes eligible export-services net income at 4% under section 2032.01(a), in place of the regular income tax, after a decree. A new small or medium business, and activity in Vieques or Culebra, can be at 2% for the first five years and 4% afterward. Services generally have to be for clients outside Puerto Rico, with the eligible work performed from Puerto Rico. Income earned before the decree, income with a Puerto Rico nexus, and base-period income can stay at regular rates. Section 2032.01(c) limits the preferential rate to the increase over base-period income when the activity already existed, and that base-period amount then steps down. Distributions of export-services earnings are exempt from Puerto Rico income tax under section 2032.01(d). That exemption is not a U.S. federal rule.

Resident-investor income is a different decree

Sections 2022.01 and 2022.02, as amended by Act 38-2026, deal with interest, dividends, and capital gains of an individual resident investor. Post-residency appreciation can be at 0% or 4% depending on the application date and the recognition window. Appreciation that accrued before residency is not in the 0% rule. Recognized after ten years of residency, and before the statutory end date, it is at 5%. Recognized at another time, it follows the regular Internal Revenue Code. The individual also has to meet the statute’s prior non-residence rules. For applications after December 31, 2026, Act 38 requires a showing of at least six years of non-residence before the move. The definition still contains the earlier January 17, 2006 through January 17, 2012 window.

A home, a contribution, and a report are conditions, not tax rates

Section 6020.10 requires the resident investor to buy a principal residence in Puerto Rico within two years, from an unrelated seller, and to keep it. For applications filed on or after January 1, 2027, Act 38 also requires that title be recorded, or pending recordation, in the Property Registry. The annual report includes at least $10,000 to qualifying Puerto Rico nonprofits in a required split, and a $5,000 fee ($300 to a DDEC fund and $4,700 to the General Fund). Those cash amounts are in the opening cost box. They are not a tax, and the contribution is not automatically a U.S. charitable deduction.

Employment language in the Code is not a single sentence

Section 1030.01 says an eligible business above $3 million of volume keeps at least one full-time direct employee for a Chapter 3 decree, and subsection (b)(3) of that section says a Chapter 3 decree does not require job creation. Which sentence a given decree follows is a question for the decree and for counsel. This sketch does not add an employee’s wages, a municipal license, or property tax.

1. Mainland column: business profit, minus employer Social Security and Medicare, plus other ordinary income and interest, is taxed at the 2026 federal individual brackets after the basic standard deduction ($16,100 single, $32,200 joint). Long-term gains and qualified dividends use the 0%, 15%, and 20% bands. The 3.8% net investment income tax uses the statutory thresholds, which Rev. Proc. 2025-32 does not inflate: $200,000 single and $250,000 joint.
2. Business profit is treated as income from a business in which you materially participate, so it is left out of the net investment income tax. If the activity is passive, that tax can be higher.
3. The state percentage is applied flat to that mainland income before the federal standard deduction. The Puerto Rico column assumes the year is after a completed change of domicile, with no state income tax and no nonresident source tax. Part-year returns, credits for taxes paid, and states that contest a move are outside the sketch.
4. Payroll tax is the 2026 employee and employer Social Security tax of 6.2% each up to $184,500, Medicare tax of 1.45% each with no wage cap, and the employee Additional Medicare tax of 0.9% above the same $200,000 / $250,000 thresholds. The sketch assumes a W-2 salary. It is not self-employment tax, and it does not split wages with a spouse.
5. Puerto Rico column: eligible export profit after salary and employer payroll is taxed at the rate you select. Salary and other ordinary income use the individual table in Code section 1021.01 (0% through $9,000, then 7%, 14%, 25%, and 33%). Above $500,000 of that ordinary base, the gradual adjustment is 5% of the excess, capped here at $8,895. Section 1021.01(c) then takes 95% of the regular tax plus that adjustment, or 92% when the income entered is $100,000 or less. Hacienda’s 92% test uses specific gross-income lines. This page uses the sum of the amounts you typed.
6. Long-term gain that is not at a decree rate uses the lower of the 15% special contribution in section 1023.02 and the extra regular tax on that gain. Deduction allocation on Schedule A2, which matters when preferential income is $20,000 or more, is not done.
7. Federal tax remains in the Puerto Rico column for every amount whose §933 box is unchecked. IRC §933 excludes Puerto Rico-source income of a bona fide resident. It does not exclude U.S.-source income. A decree is a Puerto Rico instrument.
8. The qualified business income deduction under §199A remains in the Code for 2026, with a minimum deduction and a $1,000 qualified-business-income threshold described in Rev. Proc. 2025-32. The switch on this page is illustrative and off by default.

2026 figures used in the sketch

Joint brackets follow the same seven rates, with knots at $24,800, $100,800, $211,400, $403,550, $512,450, and $768,700. Long-term-gain 0% / 15% bands: single $49,450 and $545,500; joint $98,900 and $613,700. Puerto Rico regular knots: $9,000, $25,000, $41,500, and $61,500. Sources were read on November 9, 2026. This page does not refresh them.

Left out on purpose

Alternate basic tax, itemized deductions, the aged or blind additional standard deduction, the alternative minimum tax, federal and Puerto Rico credits, municipal license tax, property tax, required payroll for other employees, transfer-pricing adjustments, related-party rules, loss carryovers, the move year, community-property splitting, and any tax credit. Head of household and married filing separately are not modeled. The page does not claim a credit, and it does not file anything.

• Business profit, other ordinary income, post-move gain, and pre-move appreciation are separate. The opening example still places the full $1,000,000 in the export-services box so the earlier example can be compared, and the label says that is an assumption.
• The export-services rate is 4% unless you select the 2% initial-period rate. The page does not offer a universal 4% claim, and it does not offer a 1% pioneer rate.
• Employer payroll is deducted before income tax. On the opening example that deduction is $11,475.
• Puerto Rico regular tax uses the 95% computation in section 1021.01(c), and the gradual adjustment when the ordinary base is above $500,000. An earlier flat use of the table, with no 95% factor, overstated Puerto Rico tax on salary.
• The December 31, 2026 date is the resident-investor application date under Act 38-2026. It is not the move date, and it does not zero out salary, payroll, non-qualifying income, pre-move gain, or federal tax.
• Section 933 exclusions are checkboxes. A line under the result shows the difference if every exclusion is turned off.
• The English OGP compilation reviewed on November 9, 2026 lists Act 38-2026 in its amendment legend, and the section text it showed for 2022.01 was still the pre-amendment wording. The 0% and 4% split on this page follows the certified Act 38-2026, not that lagging English section text.

Primary agency and statute pages. A later amendment will not appear here until someone edits the page. The state-rate menu is a set of approximate top rates, not a source of law.

• IRS Rev. Proc. 2025-32 (2026 inflation adjustments, including the OBBBA)
• IRS Publication 15 (2026), Employer’s Tax Guide — Social Security wage base $184,500
• SSA 2026 COLA fact sheet — same $184,500 wage base
• IRS Publication 570 — bona fide residence: presence, tax home, and closer connection
• IRS Instructions for Form 8898 — the presence test is one of several tests
• IRS Tax Topic 901 — Puerto Rico-source income and the federal return
• Treas. Reg. §1.937-1 — bona fide residency in a possession
• Act No. 38-2026 (P. de la C. 505), certified copy, Department of State, March 11, 2026
• LexJuris convenience text of Act 38-2026 (Spanish)
• OGP English compilation of Act 60-2019, revision legend through May 18, 2026
• DDEC Informative Bulletin No. 2026-004 — resident-investor filing timestamp
• Puerto Rico Internal Revenue Code of 2011, Hacienda compilation retrieved November 9, 2026
• Hacienda individual return instructions for tax year 2025 (regular tax, gradual adjustment, preferential rates)