The closer connection test, factor by factor

The third of the three tests, and the only one with no number in it. Ten factors, weighed against each other, with no score to reach — which is why it is answered with documents rather than arithmetic.

Standard
No closer connection to the US or a foreign country than to Puerto Rico
Window
During any part of the tax year — with the move-year exception
Turns on
Ten enumerated factors, weighed. No scoring, no threshold.
Compared against
The US and foreign countries added together, not separately
Statutory basis
26 CFR § 1.937-1(e), applying § 301.7701(b)-2(d)

TrackedPR records and organises days. It does not determine residency, and nothing on this page is tax or legal advice.

The standard

You did not have a closer connection to the United States or a foreign country than to Puerto Rico during any part of the tax year.

"During any part of the tax year" is not a formality. This is not a year-end snapshot; it is a condition that has to hold throughout, which is why a file that only exists in April is a weaker answer than one that was being kept all year.

The comparison is one against the rest

Your connections to Puerto Rico are weighed against the aggregate of your connections to the United States and to foreign countries — not against each of them separately. Ties split across a mainland state and a country abroad are added together on the other side of the scale, not divided.

This is the detail that changes answers. Someone splitting a year between Puerto Rico, a mainland state and somewhere abroad can be the largest single share of the three and still fail, because the other two are added together on the far side of the scale. A plurality is not a closer connection.

The ten factors

The regulation enumerates them. It does not weight them, rank them, or say how many you need — these are the facts and circumstances the question gets answered from:

  1. 1Where your permanent home is.
  2. 2Where your family is.
  3. 3Where your personal belongings are — cars, furniture, clothing, jewellery.
  4. 4Where the social, political, cultural and religious organisations you currently belong to are.
  5. 5Where you do your routine personal banking.
  6. 6Where you conduct business activities, other than the ones that make up your tax home.
  7. 7Which jurisdiction issued your driving licence.
  8. 8Which jurisdiction you vote in.
  9. 9Which country you name as your residence on forms and documents.
  10. 10Which official forms you file — the regulation names Form 1078, Form W-8 and Form W-9 as examples.

Ten factors, and no scoring. The regulation does not say how many you need or what any is worth, which is exactly why this test is answered with a file of documents rather than with a number.

Two of them are worth singling out because they are pure administration and are also among the most visible: your driving licence and your voter registration. Both are a form and an afternoon. Both sit on the list explicitly. And voter registration does double duty — it is also one of exactly three things that create a significant connection to the United States under the presence test, so leaving it in place costs you on two tests at once.

The year you move

The same exception that applies to the tax home test applies here: in the year of a move, this test is measured over the last 183 days of the year rather than all of it — provided you were not a bona fide resident in the 3 years before, and you are one for each of the 3 years after. It does not relax the presence test.

Three worked examples

Closer connection to Puerto Rico

Moved properly, and the paperwork followed

  • Home, family, cars and belongings in Puerto Rico. Licence and voter registration changed within the first months.
  • Day-to-day banking here; the mainland account kept open but dormant.
Most of the ten factors point one way, and the ones that do not are inactive rather than contested.

A strong position, and note what made it strong: the licence and the registration, which are the two factors that are pure administration and are also the two most often left undone for a year.

Likely fails — on the aggregate rule

Split three ways — and the split does not help

  • Six months in Puerto Rico, three in a Miami condo they own, three in a flat in Madrid.
  • Family in Florida; banking mostly in the US; belongings roughly divided.
Puerto Rico is weighed against the United States and foreign countries added together, not against each one separately.

This is the misreading that does the most damage. Being the single largest of three places is not the test — the aggregate rule puts Miami and Madrid on the same side of the scale, and against that combined weight a plurality is not a closer connection.

Fails for most of the year

Everything moved, in November

  • Genuinely relocated, but the licence, the registration, the banking and the address changes all happened in the last two months of the year.
  • Not a year of move under the special rule — this was the third year of residency.
The test asks about any part of the tax year, not the end of it.

Ten months of the year had a closer connection to the mainland, and being right by December does not cure them. The lesson is not that late is fatal in every year; it is that this test is a condition you hold, not a state you reach.

What people get wrong

  1. 1That it is a majority vote of the ten factors. There is no scoring in the regulation. Factors are weighed, and a single heavy one — a permanent home, a family — is not cancelled by several light ones.
  2. 2That being the biggest of three places is enough. Puerto Rico is compared against the United States and foreign countries combined.
  3. 3That it can be established at the end of the year. The test says during any part of the tax year. Outside a move year, ties that only arrived in November leave ten months unanswered.
  4. 4That it is the same question as the tax home test. It is not, and factor six says so explicitly — it excludes the business activities that constitute your tax home, precisely so the two tests are not asking one question twice.
  5. 5That intent counts for something. Nothing on the list is about what you meant to do. All ten are facts with paperwork behind them.

Why this one is answered with a file

A test with no threshold cannot be passed by arithmetic. What it can be answered with is a documented picture — each factor, where it points, and what shows it — assembled while the year is happening rather than reconstructed after someone asks.

That file is what the closer-connection library is: the items already written out and grouped, with somewhere to record where each document actually lives. This page is the test; that page is the work.

The file is easier to keep than to build

Start it while the year is still running, alongside the day count it travels with.

Start tracking free

Official sources

Everything stated as a rule on this page comes from one of these. Where our wording and the government's differ, theirs governs.

The tax home test, the closer connection test, the year-of-move rules and the day exceptions, in plain English.
Paragraph (d) is the tax home test, (e) the closer connection test, (f) the year of move, and (c)(3) the day exceptions.
The ten enumerated factors themselves. Paragraph (e) of the regulation above points here.