Puerto Rico Act 60 and the 183-Day Test: What Bona Fide Residence Really Requires (2026)

Puerto Rico's Act 60 regime offers something no foreign move can: potentially dramatic tax treatment on certain investment income and export-services business, without leaving the US federal system's territory framework. Every bit of it hangs on one status: being a bona fide resident of Puerto Rico, and that status is built from tests a day log either proves or sinks. Updated 5 August 2026.

The three tests of bona fide residence

Under the federal rules for US territories (IRS Publication 570), a bona fide PR resident generally must meet all three for the tax year:

• Presence. The headline route is at least 183 days in Puerto Rico, though the rules provide alternatives (such as 549 days across three years with minimums each year, or fewer than 90 US days). Whichever route, it is arithmetic on a day log.
• Tax home. Your regular or principal place of business or employment must be in PR, not the mainland.
• Closer connection. Your ties, home, family, belongings, licences, must sit more closely with PR than with the US mainland or elsewhere.

Why the counting is unforgiving here

Act 60 movers are, almost by construction, high-income taxpayers leaving high-tax states, which makes them audit targets from two directions at once: the IRS examining bona fide residence (it has run campaigns on exactly this), and the departed state examining whether state residency really ended, the same fight covered in leaving California and leaving New York. Both examinations start with the same question: where were you, day by day? Note also that decree holders have ongoing obligations (annual filings, charitable contributions, and, for individual investors, PR real-property requirements) that sit alongside the residence tests.

The record

A contemporaneous log covering PR days, mainland days and everywhere else is the spine of both the 183-day computation and the closer-connection story. The Days Monitor iPhone app tracks it automatically, with a custom 183-day PR rule, state-level counts for the exit fight (see the state table), and timestamped exports for Form 8898 conversations with your adviser. Download it on the App Store.

Sources

• IRS Publication 570, Tax Guide for Individuals With Income From US Territories (accessed 5 August 2026)
• IRS, About Form 8898 (beginning or ending bona fide residence in a US territory) (accessed 5 August 2026)

This article is general information, not legal, tax or immigration advice. Rules change and your facts matter; verify with the official sources linked above and take professional advice.