The tax home test: where you work, not where you live

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 tax home outside Puerto Rico during any part of the tax year.

Note the shape of it. It is not "you have a tax home in Puerto Rico" — it is that you do not have one outside Puerto Rico, at any point in the year. A tax home that moved in March leaves January and February to account for.

What a tax home is

It is a term of art, and it is not your house. The definition runs through section 911(d)(3) and works as a chain — you take the first rung that applies to you:

1. 1Your regular or main place of business, employment or post of duty. Wherever that is — regardless of where your family home is. Pub 570 says so in as many words, which is the sentence that surprises people: a spouse and children living in Puerto Rico do not move your tax home there if your work does not.
2. 2If the nature of your work gives you no regular or main place of business — where you regularly live. This is the rung most remote workers land on, and it is the one that usually helps. The test becomes where you actually live rather than where an employer is incorporated.
3. 3If neither fits — you are an itinerant, and your tax home is wherever you work. A genuinely nomadic year is the hardest version of this test, because a tax home that follows you offers nothing to point at. It is the case most worth raising with an advisor before the year rather than after.

The tax home test is the one people assume they have passed because they moved. Moving is about where you live; this test is, first and before anything else, about where you work.

What strains it

None of these is fatal by itself and none is a rule. They are the shapes the first rung tends to take when someone has moved but their working life has not:

1. An office, desk or post of duty kept on the mainland that you return to. A place of business you go back to is the clearest version of a tax home outside Puerto Rico.
2. An employer that treats you as based somewhere else — a mainland work location on file, a state that still has you on payroll withholding.
3. A practice, clinic or site you fly to and work at on a schedule. Regularity is what the word "regular" is doing in the definition.
4. Splitting the year between two places you work from, with nothing making one the principal one.

The year you move

There is a real exception for the move year, and it is more useful and more limited than it is usually reported. It relaxes this test and the closer connection test to the last 183 days of the year — so a tax home that was on the mainland in February does not sink the year, provided three conditions hold:

1. 1You were not a bona fide resident of Puerto Rico in any of the 3 tax years before the move.
2. 2In the year of the move, you have no tax home outside Puerto Rico and no closer connection to the United States or a foreign country during the last 183 days of the year.
3. 3You are a bona fide resident of Puerto Rico for each of the 3 tax years after the year of the move.

Puerto Rico has its own rule for leaving, which the other territories do not: if you were a bona fide resident for at least 2 preceding years, you can keep that status for the part of the year before you go, provided your tax home stayed in Puerto Rico until the day it ceased to be and your closer connection was to Puerto Rico throughout that part of the year.

Three worked examples

What people get wrong

1. 1That moving the family moves the tax home. Publication 570 addresses this directly: your tax home is your regular or main place of business regardless of where you maintain your family home. It is the single most surprising sentence in the whole of this test.
2. 2That remote work settles it automatically. It usually helps a great deal, because it removes any rival place of business — but an employer that still records a mainland work location, or a desk you use on visits, is evidence pointing the other way.
3. 3That it is measured at year end. It says during any part of the tax year, and outside the move-year exception that means all of it.
4. 4That the move-year exception covers the day count. It covers this test and the closer connection test. Nothing relaxes the presence test.

What a record can and cannot do here

Be plain about this: a day tracker does not answer the tax home test. Where you worked is not a question about days. What the record does is supply the underlying facts the question gets answered from — where you actually were, day by day, and how much of the year that pattern held. An advisor arguing your tax home is in Puerto Rico is arguing from exactly that kind of evidence.

The rest of it — the licence, the registrations, the business paperwork — belongs to the closer connection test, and is gathered in the evidence library.

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.