Puerto Rico — Act 60 Bona Fide Residency (183 Days)

Summary

Day threshold

183 days in Puerto Rico

Window

Calendar year (1 Jan – 31 Dec)

Triggers on

Day 183

Travel carve-out

Up to 30 days outside both PR and the US may count

Carve-out condition

Your PR days must exceed your US days

Also required

Tax-home & closer-connection tests

Basis

IRC §937 / IRS Pub. 570

To be treated as a bona fide resident of Puerto Rico under Act 60, the physical-presence prong requires you to be present in Puerto Rico for at least 183 days during the calendar year. Reaching day 183 satisfies that prong — but presence alone is not enough. You must also pass the tax-home test and the closer-connection test under IRC §937, all in the same tax year, before you count as a bona fide resident.

One detail is worth knowing before you plan a year: IRS guidance lets up to 30 days spent outside both Puerto Rico and the United States count toward the 183 — but only if your Puerto Rico days already exceed your US days. Bounded counts only days you were physically in Puerto Rico, so its figure can understate your progress. It never overstates it.

Who it applies to

This matters most if you are:

• A US citizen or resident relocating to Puerto Rico to claim Act 60 individual tax incentives.
• A remote worker, investor, or business owner splitting time between the mainland and Puerto Rico.
• Someone in their first partial year in Puerto Rico, where the tax-home and closer-connection tests only look at part of the year — the presence test still applies to the whole year.

It applies to individuals regardless of the specific decree — the §937 residency tests are the gateway to Act 60 benefits, not the incentive itself.

The rule — and why it exists

Bona fide residence in a US territory is defined by IRC §937 and detailed in IRS Publication 570. It rests on three tests that must all be met for the tax year:

• Presence test. Most people satisfy this by being present in Puerto Rico for at least 183 days in the calendar year (alternative presence rules exist — see exceptions).
• Tax-home test. Your main place of business or employment — your tax home — must be in Puerto Rico for the year.
• Closer-connection test. You must have a closer connection to Puerto Rico than to the US or any foreign country, judged on family, home, belongings, and social and economic ties.

Why it exists: because Puerto Rico offers substantial tax advantages, the US uses these tests to make sure the benefit goes to people whose economic life has genuinely moved there — not to those who simply visit enough days while keeping their real base on the mainland.

Counting the days

1. 1Add up every day you are physically present in Puerto Rico during the calendar year (1 January to 31 December).
2. 2The days do not need to be continuous — they can be spread across multiple visits within the same calendar year.
3. 3Any day you are present in Puerto Rico counts as a full day, including arrival and departure days.
4. 4The count resets to zero each 1 January; it is a calendar-year test, not a rolling 12-month window.
5. 5Separately, work out whether the 30-day travel carve-out is available to you: compare your PR days against your US days, and if PR wins, up to 30 days spent outside both can be added.
6. 6Reaching 183 days satisfies the presence prong — but not the tax-home or closer-connection tests.

The 30-day travel carve-out

IRS Publication 570 includes among days of presence "any day (up to a total of 30 days) that you are outside the relevant territory and the United States for business or personal travel". Two conditions attach, both stated in the same guidance:

• The comparison condition. It "applies only if the number of days you are considered present in the relevant territory exceeds the number of days you are considered present in the United States". Heavy mainland travel switches the carve-out off.
• The 549-day exclusion. It "does not apply for purposes of calculating the minimum 60 days of presence... required for the 549-day presence test".

Publication 570 works the example for the Northern Mariana Islands (the rule is the same for Puerto Rico): a couple on an 85-day trip to Europe and Asia pick up 30 deemed days, taking a 160-day territory count to 190 and meeting the presence test. Note the legal footing — the 30-day rule sits in proposed regulations that taxpayers may rely on and is administered through Pub. 570, not in the final text of 26 CFR §1.937-1. Cite the publication, not the CFR, for this limb.

Bounded cannot model it: the condition compares two regions and the allowance is capped, neither of which a single-region calendar-year counter can express. Counting only physical PR days is the conservative choice — your real position may be up to 30 days better than the app shows, never worse.

Examples

Example 1 — clearly resident

You move to San Juan in January, work from there, and spend 210 days in Puerto Rico across the year. Your job and home are in Puerto Rico and your family moved with you. You pass all three tests and are a bona fide resident.

Example 2 — enough days, but fails connection

You spend 185 days in Puerto Rico but keep your primary home, your main job, and your family in Florida. You meet the presence test, yet your tax home and closer connection remain on the mainland — so you are not a bona fide resident.

Example 3 — falls short on days

You genuinely relocate but travel heavily, spending only 150 days in Puerto Rico. You fail the 183-day presence test for that year and would need to rely on one of the alternative presence rules to qualify.

Exceptions & edge cases

• Alternative presence tests. Treas. Reg. §1.937-1(c) gives five routes: 183 territory days; 549 days across three years with at least 60 in each; no more than 90 days in the United States; no more than $3,000 of US-source earned income plus more territory days than US days; or no significant connection to the US. Any one is enough. Bounded tracks the ≤90-US-days limb separately — see the 90-US-days counter, which works identically for a Puerto Rico position.
• The 30-day travel carve-out is conditional. Up to 30 days outside both PR and the US can be deemed days of presence — but only while your PR days exceed your US days, and never toward the 60-day minimums inside the 549-day test. It rests on proposed regulations administered through Pub. 570.
• Other deemed-presence days. Days outside the territory to receive qualifying medical treatment, or to accompany a parent, spouse or child receiving it, and days away because of a declared disaster or mandatory evacuation also count as presence (Treas. Reg. §1.937-1(c)(3)(i)).
• Year of the move. Special first-year and last-year rules apply the tax-home and closer-connection tests only to the part of the year after you establish (or before you end) residency.
• Act 60 investor decrees changed in 2026. Act 38-2026, signed on 10 March 2026, keeps the 0% Puerto Rico rate on post-move interest, dividends and capital gains for resident individual investor decree applications filed by 31 December 2026 (through 2035, as before). Applications filed from 1 January 2027 pay a 4% rate on that income instead and must show the applicant was not a Puerto Rico resident for at least six years before moving — on top of the retained rule, for all applicants, that you were not a Puerto Rico resident between 17 January 2006 and 17 January 2012; the program is extended to 2055, and existing decrees keep their terms. None of this changes the federal §937 residency tests on this page.
• US-source and built-in gains. Bona fide residency does not shelter US-source income or gains that accrued before you moved; those can remain subject to US federal tax.

Common misconceptions

• "183 days makes me an Act 60 resident." False — it only clears the presence prong; you still need the tax-home and closer-connection tests.
• "Bona fide residency means no US tax at all." False — US-source income, pre-move gains, and federal filing obligations for US citizens can still apply.
• "It's a rolling 12-month count." False — the presence test runs on the calendar year and resets each 1 January.
• "Travel days always top up my count by 30." Only conditionally. The carve-out requires your PR days to exceed your US days, is capped at 30, and does not help with the 549-day test's 60-day minimums.
• "Bounded is short, so I have failed." Not necessarily. The counter deliberately counts only physical PR days. Deemed travel days, and the four alternative presence tests, can put you over the line when the app shows you under it.

Frequently asked questions

Sources

• IRS — Bona fide residence in a US territory (Publication 570)
• IRS — Individuals living or working in US possessions
• Treasury Regulation 26 CFR §1.937-1 (Cornell LII)
• Federal Register — Residence Rules Involving U.S. Possessions (proposed 30-day rule, 27 August 2015)
• Puerto Rico Legislature (SUTRA) — Ley 38-2026, amending the Act 60 resident individual investor regime