Hurricane Isaias Declared a Major Disaster – 14 Automatic Days of Puerto Rico Presence

On September 9, 2020, Hurricane Isaias (DR-4560-PR) was declared a major national disaster by President Trump, and those Act 60 (formerly Act 20 and 22) decree holders seeking to qualify for bona fide residence in 2020 will automatically receive 14 days of presence in Puerto Rico. If you are one of those decree holders who always cut it close to the 183 days, you now have an automatic 14 days to count towards your total on-island days.

For those Act 60 (formerly Act 20 and 22) decree holders seeking to qualify as bona fide residents of Puerto Rico for 2020, it is important to understand that per the IRS rules (see IRS Publication 570: Current Tax Guide for Individuals with Income from U.S. Possessions), you must be present in the relevant possession (Puerto Rico) for at least 183 days during the tax year.

The IRS Publication 570 specifically states that you are considered to be present in the relevant possession (Puerto Rico) on any of the following days: “Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during a 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (“FEMA”) notice of a federal declaration of a major disaster is issued in the Federal Register.”

For those in Puerto Rico who are not living in an area Puerto Rico that is not within the designated FEMA impact area, it is important to note that the IRS language specifically states that the major disaster must only occur “in the relevant possession” and not that it must occur in the specific town, city, county, etc. of the relevant possession where FEMA aid is being provided. As written, if you are anywhere in the relevant possession (Puerto Rico), the 14-day-period rule applies to you, period.

The listed incident period for the Hurricane Isaias major disaster is July 29, 2020 – July 31, 2020.

Therefore, Act 60 (formerly Act 20 and 22) decree holders seeking to qualify as bona fide residents of Puerto Rico for 2020 should be eligible for 14-days of automatic presence that can be applied for any consecutive 14-day period between July 16, 2020 and August 13, 2020.

Note that the 14-day period must overlap with the incident period of the major disaster.

Disclaimer: Neither PRelocate, LLC, nor any of its affiliates (together “PRelocate”) are law firms, and this is not legal advice. You should use common sense and rely on your own legal counsel for a formal legal opinion on Puerto Rico’s tax incentives, maintaining bona fide residence in Puerto Rico, and any other issues related to taxes or residency in Puerto Rico. PRelocate does not assume any responsibility for the contents of, or the consequences of using, any version of any real estate or other document templates or any spreadsheets found on our website (together, the “Materials”). Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction.