At Globe Live Media we explain what publication 179 is for employers who have businesses in Puerto Rico, as well as what you should know about this publication if you are an employee
Publication 179 of the United States Internal Revenue Service (IRS) is a summary of the responsibilities of employers whose main business is located in Puerto Rico or who have employees whose income is subject to withholding. the state tax on the income of Puerto Rico.
Specifically, this publication contains information about employer withholding, deposits, payments, and tax reporting under the Federal Income Tax Insurance Act (FICA).
At JustDinero we tell you some of the most important aspects of publication 179, specifically what you should know about it if you are an employee.
What do I need to know about Publication 179 if I am an employee?
According to Publication 179, all employee wages are subject to Social Security tax, Medicare tax, and federal unemployment tax (known as FUTA tax).
Social Security withholding is only for employees who earn up to $147,000 per year (by 2022), including tips. It should be noted that the Social Security contribution remains at 6.2% of income for the employee and for employers.
On the other hand, the contribution for Medicare remains at 1.45%.
Domestic workers or employees must also contribute to Social Security and Medicare if they earn $2,400 or more in cash during 2022.
Should a person from Puerto Rico file taxes with the IRS if he lives in Puerto Rico?
According to the IRS, if you are a resident of Puerto Rico for an entire tax year, it does not require you to file a federal income tax return only if your only source of income comes from Puerto Rico.
However, if you have income from sources outside of Puerto Rico (and said sources are in the United States), you will be required to file taxes on said income.
In the event that you are an employee of the United States government and you are a resident of Puerto Rico, you must declare taxes on the income that you have received for rendering service to the federal government.
However, this does not mean that, if you are a resident of Puerto Rico, you do not have tax obligations on your income. To do this, you must consult with the Puerto Rico Treasury to find out exactly how much tax you must pay on your income.