IRS Form 8898: Statement for individuals who begin or end bona fide residence in a US territory
The Form 8898 IRS page covers taxpayers who take the position that they became or ceased to be bona fide residents of 1 of 5 US territories. As of August 2026, the current IRS form and instructions are still the October 2024 revision, which added an online, mobile-friendly submission option.
The filing rule turns on both a residency-status change and worldwide gross income of more than $75,000. The 8898 form is separate from the expat tax forms used for foreign-country exclusions or foreign financial reporting, so moving to Puerto Rico, Guam, or another covered territory does not make Form 2555, FBAR, or Form 8938 a substitute.
What is Form 8898? A quick answer for US territory residents
Form 8898 is a statement filed with the IRS by taxpayers who become or cease to be bona fide residents of a covered US territory. Under the current IRS instructions, the filing requirement generally applies when worldwide gross income for that tax year is more than $75,000 and a specified residency change occurs.
The 8898 tax form notifies the IRS of a change in bona fide residence under IRC Section 937(c) for Puerto Rico, American Samoa, Guam, the US Virgin Islands, or the Northern Mariana Islands. The official About Form 8898 page states its purpose, while our guide to whether Puerto Rico residents owe US tax covers related federal filing rules.
Form 8898 is a residency-change statement for 5 US territories, not a foreign-asset disclosure form or an income-tax return. Older material may call these jurisdictions US possessions, but the October 2024 IRS form now uses “US territory” throughout.
The federal tax form 8898 also asks for facts that help the IRS evaluate residency, including presence, closer connections, and income sourcing. In practical terms, the statement of bona fide residence gives the IRS a structured record of when the taxpayer says territory residence began or ended.
Who must file Form 8898?
You must file Form 8898 when worldwide gross income is more than $75,000, and you meet an IRS residency-change condition for a covered US territory. The threshold applies separately to each spouse, and one spouse’s income is excluded when testing the other spouse’s $75,000 threshold.
The following 4 points state the filing threshold and the 3 residency-change routes in the current instructions:
- Your worldwide gross income for the tax year is more than $75,000.
- You take the position that you became a bona fide territory resident after a year in which you filed as a US citizen or resident but not as a bona fide resident of that territory.
- You are a US citizen or resident who takes the position that you ceased bona fide territory residence after a year in which you filed as a bona fide resident.
- You take the position that you became a bona fide resident of Puerto Rico or American Samoa after a year in which you had to file as a bona fide resident of the USVI, Guam, or CNMI.
The IRS territory residence and Form 8898 guidance gives the current filing threshold and spouse rule for each tax year. If both spouses meet the conditions, each files separately; our bona fide residence test guide explains the three-part territory residency standard.
The five US territories covered by Form 8898
Form 8898 applies to residency changes involving exactly 5 US territories: Puerto Rico, American Samoa, Guam, the US Virgin Islands, and the Northern Mariana Islands. Each jurisdiction has distinct filing and income-source rules, so the federal result depends on the territory and income type.
The following 5 territories are covered by the current IRS form:
- Puerto Rico.
- American Samoa.
- Guam.
- The US Virgin Islands.
- The Commonwealth of the Northern Mariana Islands (CNMI).
Territory residence can change where a taxpayer files and which territory-source income is included on a US federal return. For instance, bona fide Puerto Rico residents who are US citizens or resident aliens generally exclude Puerto Rico-source income from US gross income, subject to exceptions; the IRS Puerto Rico tax-credit guidance and our guide comparing bona fide residence and physical presence tests explain why the tests and tax results should not be conflated.
Bona fide residents of Puerto Rico can generally exclude qualifying Puerto Rico-source income from their US federal return, but that rule does not automatically carry over to American Samoa taxation, Guam tax residents, US Virgin Islands taxes, or CNMI filing. Each territory’s system must be checked separately.
Get expert help filing Form 8898
A move involving 1 of the 5 covered territories can create a separate Form 8898 filing even when your federal income-tax result looks straightforward for that year. TFX can review the federal filing package and explain which US and territory-related forms belong in it.
Form 8898 filing threshold and penalty for non-compliance
The filing threshold is worldwide gross income of more than $75,000, and a required Form 8898 that is missing, incomplete, or incorrect can carry a $1,000 penalty. A reasonable-cause exception applies, so the penalty should not be described as automatic in every late-filing case.
The following 2 numbers control the basic filing-risk check:
- More than $75,000: the worldwide gross-income threshold, tested before deductions, credits, rebates, or exclusions.
- $1,000: the potential penalty for a required filing that is missing or defective, unless reasonable cause and lack of willful neglect are shown.
Worldwide gross income includes money, goods, property, and services from US, territory, and foreign sources, including income that may later be excluded. That is why the current Form 8898 and the IRS instructions use gross rather than taxable income; our Form 1040 guide helps distinguish gross income reporting from the final Form 1040 tax calculation.
The $75,000 test is applied before a possession exclusion or another income exclusion reduces taxable income. A taxpayer with $82,000 of worldwide gross income cannot treat the threshold as $62,000 merely because $20,000 may later be excluded under a separate rule.
How to determine bona fide residency in a US territory
Bona fide residence in a covered US territory requires 3 core tests: presence, no tax home outside the territory, and no closer connection to the United States or a foreign country. The 183-day rule is 1 way to satisfy presence, but the IRS allows other routes.
The following 3 tests make up the territory residency standard:
- Presence test: You must meet 1 of 5 alternative presence conditions, including at least 183 days in the territory during the tax year.
- Tax home test: Your tax home cannot be outside the relevant territory during the tax year.
- Closer connection test: You cannot have a closer connection to the United States or a foreign country than to the territory.
The 5 presence alternatives also include 549 days over the current and prior 2 years with at least 60 days in the territory in each year; no more than 90 US days; a limited-US-earned-income route with a $3,000 ceiling; or no significant connection to the United States. Our physical presence test guide provides additional day-count context.
For this rule, the tax home definition generally points to your regular or principal place of business, employment, or post of duty; if you have none, it can be where you regularly live. Do not confuse these territorial residency requirements with the IRS bona fide residence test for the FEIE, which applies to the foreign earned income exclusion and foreign countries rather than US territories.
Step-by-step instructions for completing Form 8898
The current Form 8898 has 4 substantive parts: general information, presence in the United States or a US territory, closer-connection facts, and source-of-income information. The October 2024 form is not organized as taxpayer details, move year, income threshold, and signature, so the current line structure should control preparation.
The following 4 parts match the form now listed by the IRS:
- Part I – General information: Identifies the territory-status change, citizenship or resident-alien status, and worldwide gross income for the current year and prior-year average.
- Part II – Presence in the United States or a US territory: Records the move date, day counts, significant US connections, and certain US earned-income facts.
- Part III – Closer connection: Asks where your personal, family, financial, voting, business, and other ties were centered.
- Part IV – Source of income: Breaks income into territory, US, and foreign-source categories.
The strongest way to complete the 8898 form is to make every date, day count, residence fact, and income-source entry consistent with the records used elsewhere in the tax file. The official Form 8898 instructions provide line-by-line definitions, exceptions, and special year-of-move rules.
Part IV is especially important when US territory income and US-source income receive different treatment. Our guide to where to report foreign income on Form 1040 gives related reporting context, but territory sourcing follows IRC Section 937 and Publication 570 rather than the foreign-country sourcing assumptions used in a typical expat return.
The form ends with the taxpayer’s signature and declaration after Part IV. That signature does not turn it into a Form 1040 attachment: current IRS Form 8898 instructions require the statement to be filed separately or submitted through the IRS online option.
Part I: taxpayer information and territory identification
Part I uses 3 numbered lines to establish the residency change, US citizenship or resident-alien status, and worldwide gross income. The form header separately asks for the taxpayer’s name, Social Security number, and addresses before and after the change; this revision does not list an ITIN field.
Line 1 identifies whether the taxpayer became or ceased to be a bona fide resident and names the relevant territory. Line 2 asks whether the filer was a US citizen or resident alien during the year, while line 3 compares current-year worldwide gross income with the average for the 3 preceding tax years.
Married spouses do not file one joint statement when both are required to report a change: each spouse files separately. The official print instructions for Form 8898 also explain that each spouse applies the more-than-$75,000 threshold without including the other spouse’s income.
Part II: year of move – becoming or ceasing to be a bona fide resident
Part II records the move date and key presence facts, but the date entered is only 1 element of the residency analysis. Lines 4–8 address movement between the United States and the territory, days present, significant US connections, and whether certain US earned income exceeded $3,000.
The residency date should match travel records and the taxpayer’s position under the presence, tax home, and closer-connection rules. A midyear move does not automatically make the move date the first day of bona fide residence, and the 183-day route is not the only way to pass the presence test.
Based on our client scenario at TFX: a taxpayer who moves to Puerto Rico on July 1, 2025, should not assume July 1 is automatically the qualifying residence date. The filing position needs to reconcile the full-year day count and the other residency tests with the date reported; our guide to reporting timing of foreign income and taxes paid explains why timing consistency matters.
Where and when to file Form 8898
Form 8898 is filed separately from Form 1040 by the Form 1040 due date, including extensions, and the IRS permits online submission through an IRS Online Account. For a calendar-year 2025 return, the regular deadline was April 15, 2026, with an extension to October 15, 2026.
The following 3 filing rules correct a common outdated description of the process:
- Do not attach the statement to Form 1040 or Form 1040-NR.
- Mail it to the Internal Revenue Service, 3651 S. IH 35, MS 4301 AUSC, Austin, TX 78741, or use the IRS mobile-friendly online submission option.
- File it by the applicable Form 1040 due date, including a valid extension.
A valid Form 4868 extension extends the filing deadline tied to the statement, but it does not extend the time to pay federal income tax due. Our Form 1040-V payment voucher guide covers paper tax-payment procedures. This standalone filing differs from Form 2555, which the IRS describes in its foreign earned income exclusion forms-to-file guidance as a form filed with the income-tax return.
File your Form 8898 with confidence
A territory move can affect at least 2 filing systems – the US federal system and the relevant territorial system – while Form 8898 is submitted separately. TFX can prepare the federal return for you.
Form 8898 vs foreign earned income exclusion: key differences
Form 8898 covers bona fide residence changes involving 5 specified US territories, while Form 2555 lets qualifying taxpayers in foreign countries claim the foreign earned income exclusion. For tax year 2026, the FEIE limit is $132,900 per qualifying person, up from $130,000 for 2025.
The key decision rule is geography: US territory residence is governed by Section 937 and territory-source rules, while the 2026 FEIE can exclude up to $132,900 of qualifying foreign earned income under Section 911.
| Issue | Form 8898 | Form 2555 / FEIE |
|---|---|---|
| Applicable geography | Puerto Rico, American Samoa, Guam, USVI, and CNMI | Foreign countries; US territories are not foreign countries for this purpose |
| Tax mechanism | Reports a territory residency change; separate territory-source exclusions or filing rules may then apply | Claims the foreign earned income exclusion, up to $132,900 for tax year 2026 |
| Qualifying tests | Territory presence test, no tax home outside the territory, and no closer connection elsewhere | Foreign tax home plus either the FEIE bona fide residence test or physical presence test |
The two regimes should not be combined simply because both use residence and presence concepts. The IRS foreign earned income exclusion guidance describes the foreign-country exclusion, and our Form 2555 and foreign earned income guide explains how Form 2555 works when a taxpayer actually qualifies under Section 911.
The term “possession exclusion” is also distinct from the FEIE. Territory exclusions arise under territory-specific federal rules, such as the Puerto Rico-source exclusion under Section 933 or the American Samoa rules, rather than the Section 911 foreign earned income exclusion.
Tax benefits of bona fide residency in US territories
Bona fide residency can change federal income-tax treatment, but the result differs across all 5 covered territories and by income source. Puerto Rico and American Samoa have specific exclusions, while Guam, CNMI, and the USVI use coordinated filing rules that can change where an individual files and pays tax.
The following 4 territory-tax patterns are the main ones an individual should distinguish:
- Puerto Rico: A US citizen or resident alien who is a bona fide resident generally reports worldwide income to Puerto Rico and excludes qualifying Puerto Rico-source income from the US return, subject to exceptions such as US government wages.
- American Samoa: A qualifying bona fide resident who files a US return may use Form 4563 for eligible American Samoa-source or effectively connected income.
- US Virgin Islands: A bona fide resident who reports and pays tax on worldwide income to the USVI generally does not also file an income-tax return with the IRS, although separate federal obligations can remain.
- Guam and CNMI: Bona fide residents generally file one individual income-tax return with the relevant territory under the coordinated filing rules described in Publication 570.
Territorial tax benefits do not mean every dollar earned while living in a territory escapes US tax. Source, employer, residency period, and territory control the result. The IRS USVI tax-credit guidance explains USVI treatment, while our foreign earned income exclusion guide shows why territory rules differ from the FEIE.
A US citizen with net self-employment earnings of at least $400 in a US territory can still owe US self-employment tax even if no regular Form 1040 is otherwise required. US territory income therefore needs both source and tax-type classification.
Common mistakes when filing Form 8898
The main Form 8898 errors involve the $75,000 threshold, day counts, spouse-by-spouse filing, the residency-change date, and income sourcing. A missing or defective required statement can trigger a $1,000 penalty, while a sourcing error can also change income reported to the IRS or a territory.
The following 5 errors deserve a separate review before submission:
- Missing the filing requirement: Testing taxable or net income instead of worldwide gross income before deductions and exclusions.
- Treating 183 days as the only presence test: The IRS provides 5 alternative presence routes, each with its own conditions.
- Using one statement for both spouses: Each spouse who independently meets the filing conditions submits a separate form.
- Using an unsupported residence-change date: A move date should not be treated as the qualifying date without reconciling the full residency tests.
- Misclassifying income source: Territory, US, and foreign-source income can lead to different federal and territorial results.
Based on our client scenario at TFX: a taxpayer who relocates to Puerto Rico in November 2025 should not claim full-year bona fide residence solely because the move occurred before December 31. The first qualifying year depends on the presence test and the other Section 937 conditions, not the calendar date alone.
The $1,000 penalty is also not properly described as accruing automatically every year after a single omission. It applies to a tax year for which the taxpayer was required to file and failed to file correctly, subject to reasonable cause; our case study on a denied foreign earned income exclusion shows how day-count evidence can matter when an IRS residence-related tax position is challenged.
Form 8898 for Puerto Rico: special considerations under Act 60
Form 8898 reports a federal Puerto Rico residence change under IRC Section 937; it does not grant an Act 60 decree or validate Act 60 benefits. Since launching its compliance campaign in January 2021, the IRS has identified approximately 100 high-income individuals claiming Puerto Rico Act 20, 22, and 60 benefits without meeting the requirements, with many cases referred to Criminal Investigation.
Puerto Rico tax rules changed on March 10, 2026, when Act 38-2026 amended Act 60. Resident Individual Investor decree applications filed on or before December 31, 2026, retain the prior statutory treatment described in the amended code, while specified applications filed on or after January 1, 2027, face new preferred-rate provisions, including a 4% rate on specified post-residency interest, dividends, and appreciation.
A valid Puerto Rico incentive decree and a valid federal Section 937 residence position are separate requirements, so neither should be treated as proof of the other. The IRS forms and publications for Puerto Rico residents collect forms and publications for Puerto Rico residents, and our physical presence test FAQ explains the day-count mechanics that support the federal presence analysis.
The IRS’s Act 22 Individual Investors campaign addresses taxpayers who claimed benefits without meeting Section 937 or who treated US-source income as Puerto Rico-source income.
Dual status taxpayers and Form 8898
A midyear move to or from a US territory does not, by itself, make someone a dual status taxpayer for federal income-tax purposes. IRS dual-status treatment applies when an alien is both a US resident alien and nonresident alien in the same tax year, separate from Section 937 territory residence.
A taxpayer can still have a part-year territory situation that requires income-source allocation and year-of-move rules. The date and facts reported on the statement should match that allocation, but the taxpayer should not label the year “dual status” unless their US alien residency classification also changed.
A Green Card holder could face both issues in the same year, but each test must be applied separately. Our dual-status alien filing guide explains the federal resident-alien/nonresident-alien rules for a true dual-status year. The IRS’s exceptions to the FEIE residence and physical presence tests concern Section 911 foreign-country qualification and do not convert a Puerto Rico or other territory move into dual-status alien treatment.
For territory movers, Publication 570 provides the more relevant year-of-move guidance. It explains when territory-source income can qualify for an exclusion in the moving year and when a prior period of bona fide residence matters.
How Form 8898 interacts with other IRS forms
Form 8898 can affect the facts reported across at least 4 other federal forms or schedules, but it is not attached to Form 1040 under the current October 2024 instructions. The main connections involve the income-tax return, foreign tax credits, the American Samoa exclusion, and interest or dividend reporting.
The following 4 interactions are the ones to check first:
- Form 1040: The Form 8898 filing deadline is tied to the Form 1040 due date, including extensions, but the statement is filed separately.
- Form 1116: A foreign tax credit can apply in certain territory situations when the same income is subject to both federal and qualifying tax, but credits are not allowed for taxes allocable to income excluded from the US return.
- Form 4563: Bona fide residents of American Samoa who qualify for the exclusion attach Form 4563 to Form 1040 or Form 1040-SR.
- Schedule B: Interest and dividends that remain reportable on a US return may flow through Schedule B depending on the taxpayer’s facts and source classification.
The “Form 1040 attachment” is outdated when it refers to Form 8898, but it remains accurate for forms such as Form 4563 and Form 2555. See our Form 1116 foreign tax credit guide for the credit rules that can apply when income is taxed in more than one jurisdiction.
IRS Publication 570 is the controlling federal guide for territory-specific filing and source rules. It should be read together with the current filing instructions when a taxpayer has mixed US, territory, and foreign income.
Start your territory tax return today
A residency change involving 1 US territory can alter several federal forms, income-source classifications, and filing destinations at once. TFX can help assemble the US filing package, identify which federal forms apply to the facts you provide, and flag records needed for consistent reporting throughout the year.
Frequently asked questions
Not solely because you lived there for part of the year. You file if your worldwide gross income was more than $75,000 and you meet one of the IRS residency-change conditions, including taking the position that you became or ceased to be a bona fide resident.
The IRS can impose a $1,000 penalty when a required statement is not filed, lacks required information, or contains incorrect information. The penalty does not apply if the taxpayer establishes reasonable cause and not willful neglect.
No. It reports a change in bona fide residence under Section 937(c); FBAR reports certain foreign financial accounts, while Form 8938 reports specified foreign financial assets when separate thresholds are met.
Yes. The IRS offers a mobile-friendly online version that can be submitted through an IRS Online Account. A taxpayer can also mail the standalone form to the Austin address in the current IRS Form 8898 instructions; it is not a PDF attachment to an e-filed Form 1040.
It can. A resident alien who meets the more-than-$75,000 income threshold and a covered residency-change condition may have to file, so Green Card status does not by itself remove the reporting requirement.
The Form 8898 IRS page provides the current 8898 Form and Form 8898 instructions. As of August, 2026, the IRS forms catalog still identifies the October 2024 revision as current; no newer 2026 revision is listed.
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