What differences exist between proving bona fide residency for U.S. citizens versus nonresident aliens in Puerto Rico?

1. The core tests and how they apply to U.S. citizens and resident aliens

For U.S. citizens and resident aliens the bona fide residency determination relies on satisfying three tests—presence in Puerto Rico for the tax year (often the 183‑day threshold or other presence rules under the regulation), having a tax home in Puerto Rico, and not having a closer connection to the U.S. or a foreign country than to Puerto Rico—standards explained in Publication 570 and 26 CFR §1.937‑1 ^{[2] [1] [6]}.

2. Nonresident aliens face a different regulatory path: the Substantial Presence version

Nonresident aliens living in Puerto Rico cannot simply rely on the Puerto Rico bona fide resident test used by U.S. persons; instead they must meet the Substantial Presence version of the rule as set out in 26 CFR §1.937‑1, a distinct standard that governs when a nonresident alien is treated as a U.S. person for tax purposes and therefore whether Puerto Rico residency alters U.S. filing obligations ^{[3] [1]}.

3. “Closer connection” and tax home—evidence and emphasis differ by status

While both classes must show a tax home in Puerto Rico and a lack of closer connection to the United States or another country, guidance and practitioner writeups stress that U.S. citizens are judged against longstanding Publication 570 factors—local ties, driver’s license, bank accounts, principal place of business—whereas for nonresident aliens the emphasis is calibrated through the substantial‑presence framework and examples in the regulation that treat presence counts and comparisons differently ^{[2] [1] [7]}.

4. Filing, forms and what gets reported to the IRS

A bona fide U.S. citizen or resident alien whose only income is Puerto Rico source generally will not have a U.S. federal filing obligation for that income, though special categories (for example U.S. government employees) remain reportable and certain returns or statements such as Form 8898 may be required when beginning or ending bona fide residency ^{[6] [8] [9]}. The IRS guidance also notes that nonresident aliens are treated differently for taxes like the NIIT, which does not apply to nonresident aliens ^[4].

5. Enforcement reality: incentives, audits, and “all‑or‑nothing” consequences

Puerto Rico tax incentives (historically Act 22, now folded into Act 60) create powerful motives to establish bona fide residency, and the IRS has responded with targeted audit campaigns focused on new residents; firms advising clients warn that residency determinations are “all‑or‑nothing” issues in audit contexts and that the IRS’s information document requests probe residency intensely ^{[5] [10]}.

6. Practical differences in proving residency on the ground

Practitioners emphasize different practical steps: U.S. persons typically document physical presence, severance of U.S. ties, and establishment of Puerto Rico business or personal life, while nonresident aliens must track days and satisfy the particular substantial presence calculations and examples in the regulation—meaning evidence that persuades an IRS examiner for a citizen (driver’s license, local business) may not suffice if the nonresident alien’s day count and Substantial Presence rule are not met ^{[10] [11] [1]}.

7. Bottom line — similar tests, different thresholds and consequences

The legal architecture for bona fide residency in Puerto Rico is the same triad of presence, tax home and closer connection, but the operative tests, evidentiary emphasis, and tax consequences diverge: U.S. citizens/resident aliens primarily rely on the Puerto Rico bona fide resident rules in Publication 570 and Treasury regs, while nonresident aliens must navigate the Substantial Presence variant in 26 CFR §1.937‑1 and related guidance—differences that shape filing obligations, exposure to U.S. taxes, and the intensity of IRS scrutiny, especially where tax incentives are involved ^{[2] [1] [5]}.