Puerto Rico State Income Tax Withholding Information

State Abbreviation:

PR

State Tax Withholding State Code:

RQ

Acceptable Exemption Form:

499R

Basis for Withholding:

State Exemptions

Acceptable Exemption Data:

S, M, N, Arrow LeftBArrow Right, C/Number of Dependents/Allowance Based on Deductions/Personal Exemption

TSP Deferred:

Yes

Special Coding:

Determine the Total Number of Allowances field as follows:

First Position - Enter the employee's marital status as indicated in Section A, Personal Exemption, of the exemption certificate. Valid entries are:
  Marital Status Code Description
 

S

Individual - Claiming "Complete" Personal Exemption or "None"
 

M

Married - Claiming "Complete" Personal Exemption or "None"
 

N

Married - Claiming "Half" Personal Exemption
 

Arrow LeftB

Married, Filing Separately - Claiming "Half or Complete" Personal Exemption or "None"Arrow Right
 

C

Married, Filing Jointly - Claiming "Half or Complete" Personal Exemption "Optional Computation of Tax"

 

Note: If one of the filing statuses above is not claimed, the filing status will default to "S".

 

Second and Third Position - Enter the total number of complete dependents claimed in Section B of Form 499R.

 

Note: For an employee who does not claim Arrow LeftMarried, Filing Separately - Claiming "Complete" Personal Exemption or "None",Arrow Right or Married, Filing Jointly - Claiming "Optional Computation of Tax", the employee would claim one (1) exemption for each complete exemption. For each Joint exemption, the employee would claim one-half (1/2) exemption (e.g., Two (2) complete exemptions and two (2) Joint exemptions would be entered as three (3) exemptions. The exemption allowance would be $2,500 each for the three (3) exemptions). However, the employee would have to round up or down the number of Joint exemptions. Three (3) Joint exemptions would need to be rounded down to one (1) exemption or rounded up to two (2) exemptions. If an employee claims Marital Status Code Arrow LeftB orArrow Right C, all dependent exemptions will be applied as $1,250.

 

Determine the Additional Exemptions Claimed field as follows:

First and Second Positions - Enter the total number of allowances based on deductions (Section C, item 4 of Form 499R). If the employee indicated the optional method, enter the number of allowances. If less than 10, precede with a 0.

 

Determine the Personal Exemptions Claimed field as follows:

Enter 0 (zero) in this field if the employee marked none in Section A, Personal Exemptions, of the exemption form.

Enter 1 (one) if the employee marked "Complete" or "Half".

Note: Only Marital Status Code N can claim "Half" personal exemption.

 

Determine the Veterans/Special Deduction field as follows:

Enter 0 (zero) in this field if the employee claims no Veterans or Special Deduction claimed.

Enter 1 (one) in this field if the employee claims additional Veterans Personal Exemption only.

Enter 2 (two) in this field if the employee claims Special Deduction only.

Enter 3 (three) in this field if the employee claims additional Veterans Personal Exemption and Special Deduction.

Additional Information:

The Federal Thrift Savings Plan (TSP) limit for Federal Government employees is $17,500. The catch-up contribution for Federal Government employees is $5,500.

Additional Resources:

TAXES 14-25, Puerto Rico State Income Tax Withholding

Withholding Formula (Residents)Arrow Left(Effective Pay Period 12, 2014)Arrow Right

  1. Subtract the nontaxable biweekly TSP contribution (includes the biweekly TSP catch-up contribution) from the gross biweekly wages. See additional information above.
  2. Subtract cost-of-living allowance (COLA) from the adjusted gross biweekly wages.
  3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages times 26 to obtain the annual wages.
  5. If the annual wages calculated in step 4 are $20,000 or less, the withholding tax is zero (0). Skip the remaining steps.
  6. Determine the allowance based on deductions.
    1. If the employee has elected the Complete Allowance Based on Special Deduction for Certain Individuals, use the following table to calculate the annual number of allowances.

      2. Annualized Wages

      Over:

      But Not Over:

       

      Number of Allowances

      $0

      $20,000

       

      Arrow Left5

      20,000

      24,500

       

      4

      24,500

      28,500

       

      3

      28,500

      32,500

       

      2

      32,500

      36,500

       

      1

      36,500Arrow Right

      and over

       

      0
    2. Add the number of Allowances for Special Deduction from the previous table to the number of Optional Allowances Based on Deductions claimed by the employee.
    3. Multiply the total Allowances Based on Deductions by $500 and subtract from the employee’s annualized gross pay.
  7. Subtract the appropriate Personal Exemption amount (found in the table below) from the amount calculated in the previous step.

    Marital Status Code

    Marital Status

    Personal Exemption Claimed

    Amount of Deduction

    S

    INDIVIDUAL

    Complete

    $3,500

    M

    MARRIED

    Complete

    $7,000

    N

    MARRIED

    Half

    $3,500

    Arrow LeftB

    MARRIED, Filing Separately

    Half or Complete

    $3,500Arrow Right

    C

    MARRIED, Filing Jointly Claiming "Optional Computation of Tax"

    Half or Complete

    $3,500
  8. If the employee has claimed the Additional Veterans Personal Exemption, subtract $1,500 from the amount calculated in the previous step.
  9. If the employee is claiming MARRIED and has elected the Optional Computation of Tax, multiply the total number of dependents claimed by $1,250 each. Arrow LeftIf the employee is claiming MARRIED FILING SEPARATELY, multiply the total number of dependents claimed by $1,250 each. Otherwise, multiply the number of Complete Exemption dependents by $2,500 each. See additional information above.Arrow Right (Two joint exemptions equal one complete exemption). Subtract the result from the amount calculated in the previous step, arriving at annualized taxable wages.
  10. Using the following table, apply the appropriate formula to the annualized taxable wages.

    If the Amount of Taxable Income Is:

     

    The Amount of the Puerto Rico Tax Withholding Should Be:

    Over

    But Not Over:

     

     

    $0

    $9,000

     

    0%

    minus

    $0

    9,000

    25,000

     

    7%

    minus

    630

    25,000

    41,500

     

    14%

    minus

    2,380

    41,500

    61,500

     

    25%

    minus

    6,945

    61,500

    and over

     

    33%

    minus

    11,865
  11. Divide the annual Puerto Rico income tax withholding by 26 to obtain the biweekly Puerto Rico income tax withholding.

Withholding Formula (Nonresidents) Arrow Left(Effective Pay Period 12, 2014)Arrow Right

  1. Subtract the nontaxable biweekly TSP contribution (includes the biweekly TSP catch-up contribution) from the gross biweekly wages. See additional information above.
  2. Subtract COLA from the adjusted gross biweekly wages.
  3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages times 26 to obtain the annual wages.
  5. If the annual wages calculated in step 4 are $20,000 or less, the withholding tax is zero (0). Skip the remaining steps.
  6. Apply the annual wages to the following guidelines to compute the annual Puerto Rico income tax withholding amount.

    Compute the Commonwealth of Puerto Rico Tax Withholding For:

    By Multiplying the Gross Amount Wages By:

    U.S. Citizen

    20%

    Non-U.S. Citizen

    29%
  7. Divide the annual Puerto Rico income tax withholding by 26 to obtain the biweekly Puerto Rico income tax withholding.