Individual - DeductionsLast reviewed - 03 March 2023
Puerto Rican residents and non-resident US citizens can claim the following itemised deductions to reduce their gross income. Puerto Rican non-resident foreign nationals may not claim these deductions.
Charitable contributions will be allowed as a deduction to the extent they are made to charitable organisations qualified by the Secretary and provide services to residents of Puerto Rico.
The contributions are subject to 50% of adjusted gross income (AGI).
Interest paid on student loans for qualified individuals is deductible, as are contributions to Puerto Rican educational individual retirement accounts (IRAs).
Qualified medical expenses in excess of 6% of AGI are allowed as deductions.
Mortgage interest paid on qualified residential property is deductible, limited to USD 35,000 or 30% of AGI, whichever is lower.
Contributions to Puerto Rican IRAs are deductible, limited to USD 5,000 per individual in addition to contributions made to employer sponsored qualified retirement plans. Contributions to government retirement systems are also deductible.
For taxable years beginning after 31 December 2018, contributions to governmental pension or retirement systems will be considered a reduction to the taxable wages, instead of an itemised deduction available in the tax return.
Casualty losses on a primary residence and certain personal property can be claimed as deductions.
Health Savings Account contributions
Contributions to a Health Savings Account will not be allowed as itemised deductions.
There is no standard deduction in Puerto Rico.
The personal exemption is USD 3,500 per individual and USD 7,000 for married taxpayers living together and filing jointly.
The exemption for each dependant is USD 2,500.
The veteran's exemption is USD 1,500.
Puerto Rican non-resident foreign nationals are not allowed any exemptions.
Net operating loss (NOL) deduction
For taxable years beginning after 31 December 2018, the NOL carryforward allowed will be increased from 80% to 90% of the net income.
The current 50% limitation on the NOL carryover for individuals with a net loss in a trade or business for three consecutive taxable years is eliminated, thus allowing a 100% NOL carryover.