Taxpayers from Puerto Rico, the U.S. Virgin Islands, or American Samoa who were impacted by the hurricanes and tropical storms last year have until this Friday (June 29th) to file their tax 2017 tax returns and pay their 2017 tax liability. The IRS extended the deadlines for these taxpayers regardless of a residency change and will not impose late-filing or late payment penalties if the returns are are filed and taxes paid by the June 29th extended deadline.
If any of your clients from those territories permanently relocated to the U.S. after the storms, they may be required to change their residency status on their 2017 tax return. It is important for you to find out if your clients need to file the Form 8898 along with their tax return. Those who must file the form will need to do so by Friday, June 29th or by October 15th if they have filed an extension.
The Form 8898 – Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession is for anyone from a U.S. territory who became or ceased being a bona fide resident. Form 8898 must be filed with the 2017 tax return if:
- Worldwide gross income is more than $75,000, and
- One of the following criteria applies:
- They became a bona fide resident of a U.S. possession after a tax year in which they filed a U.S. tax return as a citizen of the United States
- They are a citizen or resident of the United States who became a bona fide resident of a U.S. possession after a tax year in which they filed a tax return as a bona fide resident of the territory
- They became a bona fide resident after a tax year in which they were required to file a tax return as a bona fide resident
Please Note: This is not intended as tax advice. For more information about the Form 8898 and whether or not your client is required to complete it, please see Form 8898 Instructions.
