U.S. Individual Income Tax Return

Instructions for Form 8898

Department of the Treasury
Internal Revenue Service

(Rev. December 2011)

For use with Form 8898 (Rev. January 2007)
Statement for Individuals Who Begin or End Bona Fide Residence in a U.S.
Possession
Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
What’s New
New filing address. Form 8898
should be filed at the new address
provided for the Internal Revenue
Service Center in Philadelphia, PA. See
When and Where To File, later.
Military Spouses Residency Relief
Act. Under the Military Spouses
Residency Relief Act (MSRRA), the
civilian spouse who accompanies an
active duty member of the U.S. Armed
Forces (servicemember) to a new
military duty station in one of 50 states,
the District of Columbia, or a U.S.
possession may choose to keep his or
her prior residence or domicile for tax
purposes. See Special rule for civilian
spouse of active duty member of the
U.S. Armed Forces, later.
Future developments. The IRS has
created a page on IRS.gov for more
information about Form 8898, at
www.irs.gov/form8898. Information
about any future developments
affecting Form 8898 (such as legislation
enacted after we release it) will be
posted on that page.

Purpose of Form
Use Form 8898 to notify the IRS that
you became or ceased to be a bona
fide resident of a U.S. possession in
accordance with section 937(c). See
Bona Fide Residence, later. For this
purpose, the following are considered
U.S. possessions: American Samoa,
Guam, the Commonwealth of the
Northern Mariana Islands (CNMI), the
Commonwealth of Puerto Rico, and the
U.S. Virgin Islands.

Who Must File
You must file Form 8898 for the tax
year in which you meet both of the
following conditions:
1. Your worldwide gross income
(defined later) in that tax year is more
than $75,000, and
2. You meet one of the following:
a. You take a position for U.S. tax
purposes that you became a bona fide
Oct 25, 2011

resident of a U.S. possession after a
tax year for which you filed a U.S.
income tax return as a citizen or
resident of the United States but not as
a bona fide resident of the possession.
b. You are a citizen or resident of
the United States who takes the
position for U.S. tax purposes that you
ceased to be a bona fide resident of a
U.S. possession after a tax year for
which you filed an income tax return
(with the IRS, the possession tax
authorities, or both) as a bona fide
resident of the possession.
c. You take the position for U.S. tax
purposes that you became a bona fide
resident of Puerto Rico or American
Samoa after a tax year for which you
were required to file an income tax
return as a bona fide resident of the
U.S. Virgin Islands, Guam, or the
CNMI.
When figuring whether your
worldwide gross income is more
CAUTION than $75,000, do not include
any of your spouse’s income. If both
you and your spouse are required to file
Form 8898, file a separate Form 8898
for each of you.

!

Worldwide gross income. Worldwide
gross income means all income you
received in the form of money, goods,
property, and services, including any
income from sources outside the United
States (even if you may exclude part or
all of it) and before any deductions,
credits, or rebates.
Example. You moved to the CNMI
in December 2010 but did not become
a bona fide resident of that possession
until the 2011 tax year. You must file
Form 8898 for the 2011 tax year if your
worldwide gross income for that year is
more than $75,000.

When and Where To File
File Form 8898 by the due date
(including extensions) for filing Form
1040 or Form 1040NR. File the form by
itself at the following address:
Department of the Treasury
Internal Revenue Service Center
Philadelphia, PA 19255-0549
Cat. No. 39789W

Penalty for Not Filing
Form 8898
If you are required to file Form 8898 for
any tax year, and you fail to file it or do
not include all the information required
by the form or the form includes
incorrect information, you may be
subject to a penalty of $1,000, unless it
is shown that such failure is due to
reasonable cause and not willful
neglect. This is in addition to any
criminal penalty that may be imposed.

Bona Fide Residence
You are a bona fide resident of a U.S.
possession if you:
• Do not have a tax home outside the
possession,
• Do not have a closer connection to
the United States or to a foreign
country than to the possession, and
• Meet the presence test (defined
later).
Special rule for members of the U.S.
Armed Forces. If you are a member
of the U.S. Armed Forces who qualified
as a bona fide resident of the
possession in an earlier tax year, your
absence from that possession during
the current tax year in compliance with
military orders will not affect your status
as a bona fide resident. Likewise, being
in a possession solely in compliance
with military orders will not qualify you
as a bona fide resident of that
possession.
Special rule for civilian spouse of
active duty member of the U.S.
Armed Forces. If you are the civilian
spouse of an active duty
servicemember, under MSRRA you can
choose to keep your prior residence or
domicile for tax purposes (tax
residence) when accompanying the
servicemember spouse, who is
relocating under military orders, to a
new military duty station in one of the
50 states, the District of Columbia, or a
U.S. possession. You and your spouse
must have the same tax residence. If
you choose to keep your prior tax
residence after such a relocation, the
source of income for services
performed (for example, wages or
self-employment) by you is considered
to be (the jurisdiction of) the prior tax

residence. As a result, the amount of
income tax withholding (from Form(s)
W-2, Wage and Tax Statement) that
you are able to claim on your federal
return, as well as the need to file a
state or U.S. possession return, may be
affected. For more information, consult
with state, local, or U.S. possession tax
authorities regarding your tax
obligations under MSRRA.

Exception for the Year of the
Move
An exception applies to the tax home
and the closer connection tests for the
tax year you moved to or from the
possession. Under this exception, you
satisfy the tax home and the closer
connection tests for the tax year of the
move if you meet the requirements
explained next.
Also, a special exception applies to
the bona fide residence test for the tax
year you moved from Puerto Rico.
Under this exception, you satisfy the
bona fide residence test for the tax year
you moved from Puerto Rico if you
meet the requirements discussed later
under Year of the move from Puerto
Rico.
Year of the move to the possession.
You satisfy the tax home and closer
connection tests for the tax year you
moved to the possession if you meet all
of the following.
• You were not a bona fide resident of
the possession in any of the 3 tax years
immediately preceding the tax year of
the move.
• You did not have a tax home outside
the possession during any part of the
final 183 days of the tax year of the
move.
• You are a bona fide resident of the
possession for the 3 tax years
immediately following the tax year of
the move.
If you do not meet all of the above
conditions, you do not meet the tax
home and closer connection tests
under this exception. Instead, you must
meet the requirements explained later
under Tax Home Test and Closer
Connection Test.
Year of the move from the
possession. You satisfy the tax home
and closer connection tests for the tax
year you moved from American Samoa,
the CNMI, Guam, or the U.S. Virgin
Islands if you meet all of the following.
• You were a bona fide resident of the
possession for the 3 tax years
immediately preceding the tax year of
the move.
• You did not have a tax home outside
the possession during any part of the
first 183 days of the tax year of the
move.
• You are not a bona fide resident of
the possession in any of the 3 tax years
immediately following the tax year of
the move.

If you do not meet all of the above
conditions, you do not meet the tax
home and closer connection tests
under this exception. Instead, you must
meet the requirements explained later
under Tax Home Test and Closer
Connection Test.
Year of the move from Puerto
Rico. You qualify as a bona fide
resident of Puerto Rico for the part of
the tax year before the date you moved
from Puerto Rico if you meet all of the
following requirements.
1. You are a U.S. citizen.
2. You were a bona fide resident of
Puerto Rico for at least 2 tax years
immediately before the tax year of the
move.
3. In the year of the move, you:
a. Ceased to be a bona fide
resident of Puerto Rico, and
b. Ceased to have a tax home in
Puerto Rico.
4. You had a closer connection to
Puerto Rico than to the United States
or a foreign country during the part of
the tax year before the date on which
you ceased to have a tax home in
Puerto Rico.
If you do not meet all of the above
requirements, you are not a bona fide
resident of Puerto Rico in the year of
the move under this exception. Instead,
you must meet the requirements
explained next under Tax Home Test,
Closer Connection Test, and Presence
Test.

Tax Home Test
Under the tax home test, you generally
cannot have a tax home outside the
possession during any part of the tax
year. Your tax home is your regular or
main place of business, employment, or
post of duty regardless of where you
maintain your family home. If you do
not have a regular or main place of
business because of the nature of your
work or because you are not engaged
in a trade or business, then your tax
home is the place where you regularly
live. If you do not fit either of these
categories, you are considered an
itinerant and your tax home is wherever
you work.
Special rules for students and
government officials. Disregard the
following days when determining
whether you have a tax home outside
the possession.
• Days you were temporarily in the
United States as a student (see
Student defined, later).
• Days you were in the United States
serving as an elected representative of
the possession, or serving full time as
an elected or appointed official or
employee of the government of the
possession (or any of its political
subdivisions).

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Special rule for seafarers. You will
not be considered to have a tax home
outside the possession solely because
you are employed on a ship or other
seafaring vessel that is predominantly
used in local and international waters.
For this purpose, a vessel will be
considered to be predominantly used in
local and international waters if, during
the tax year, the total amount of time it
is used in international waters and in
waters within 3 miles of the possession
exceeds the total amount of time it is
used in the territorial waters of the
United States, another possession, or
any foreign country.

Closer Connection Test
You meet the closer connection test if
you do not have a closer connection to
the United States or a foreign country
than to the U.S. possession.
You are considered to have a closer
connection to a possession than to the
United States or to a foreign country if
you have maintained more significant
contacts with the possession(s) than
with the United States or foreign
country. Significant contacts that may
be considered include:
• The location of:
1. Your permanent home,
2. Your family,
3. Your current social, political,
cultural, professional, or religious
affiliations,
4. Where you conduct your routine
personal banking activities,
5. The jurisdiction in which you hold
a driver’s license, and
6. Charitable organizations to which
you contribute.
• The place of residence you designate
on forms and documents.
Your connections to the possession
will be compared to the total of your
connections with the United States and
foreign countries. Your answers to the
questions on Form 8898, Part III, will
help establish the jurisdiction to which
you have a closer connection.

Presence Test
You meet the presence test for the tax
year if you meet one of the following
conditions.
1. You were present in the
possession for at least 183 days during
the tax year.
2. You were present in the
possession for at least 549 days during
the 3-year period that includes the
current tax year and the 2 immediately
preceding tax years. During each year
of the 3-year period, you also must be
present in the possession for at least
60 days.
3. You were present in the United
States for no more than 90 days during
the tax year.
4. You had $3,000 or less of earned
income from U.S. sources and were
Instructions for Form 8898 (12-2011)

present for more days in the
possession than in the United States
during the tax year. See the instructions
for line 8 under Specific Instructions,
later, for the definition of earned income
from U.S. sources.
5. You had no significant connection
(defined later) to the United States
during the tax year.

!

CAUTION

If you are a nonresident alien,
see Special rule for nonresident
aliens, later.

Days of presence in the United
States or U.S. possession.
Generally, you are treated as being
present in the United States or in the
possession on any day that you are
physically present in that location at
any time during the day. If, during a
single day, you were physically present
in the United States and a possession,
that day is counted as a day of
presence in the possession. If, during a
single day, you were physically present
in two possessions, that day is counted
as a day of presence in the possession
in which you have your tax home.
Count the following days as days of
presence in the possession for
purposes of the presence test. Do not
count them as days of presence in the
United States.
• Days you were outside the
possession to receive (or to accompany
on a full-time basis a parent, spouse, or
child who is receiving) qualified medical
treatment (defined later). For this
purpose, the child must be your son,
daughter, stepchild, foster child,
adopted child, or a child lawfully placed
with you for legal adoption.
• Days you were outside the
possession because you left or were
unable to return to the possession
during any 14-day period within which a
major disaster occurred in the
possession that was declared a
disaster area by the President.
• Days you were outside the
possession because you left or were
unable to return to the possession
during any period for which a
mandatory evacuation order was in
effect for the area in the possession
where you resided.
Do not count the following days as
days of presence in the United States
for purposes of the presence test.
• Days you were in the United States
for less than 24 hours when you were
traveling between two places outside
the United States.
• Days you were temporarily present in
the United States as a professional
athlete to compete in a charitable
sports event (defined later).
• Days you were temporarily in the
United States as a student (defined
later).
Instructions for Form 8898 (12-2011)

• Days you were in the United States

serving as an elected representative of
a possession, or serving full time as an
elected or appointed official or
employee of the government of the
possession (or any of its political
subdivisions).
Qualified medical treatment. This
is medical treatment provided by (or
under the supervision of) a physician
for an illness, injury, impairment, or
physical or mental condition. The
treatment must involve:
• A period of inpatient care (requiring
an overnight stay) in a hospital or
hospice and any period immediately
before or after that inpatient care to the
extent it is medically necessary, or
• A temporary period of inpatient care
(requiring an overnight stay) in a
residential medical care facility for
medically necessary rehabilitation
services.
You must keep records of your
qualified medical treatment. For details
on the records you must keep, see
Pub. 570, Tax Guide for Individuals
With Income From U.S. Possessions.
Charitable sports event. A
charitable sports event is one that
meets the following conditions.
• The main purpose is to benefit a
qualified charitable organization.
• The entire net proceeds go to that
charitable organization.
• Volunteers perform substantially all
the work.
In figuring the days of presence in the
United States, you can exclude only the
days on which you actually competed in
a sports event. You cannot exclude the
days on which you were in the United
States to practice for the event, to
perform promotional or other activities
related to the event, or to travel
between events.
For a listing of most qualified
TIP organizations, go to IRS.gov
and click on Charities &
Non-Profits at the top of the page.
Student defined. To qualify as a
student, you must be, during some part
of each of 5 calendar months during the
calendar year (not necessarily
consecutive):
1. A full-time student at a school
that has a regular teaching staff, course
of study, and regularly enrolled body of
students in attendance, or
2. A student taking a full-time,
on-farm training course given by a
school described in (1) above or a
state, county, or local government.
Full-time student defined. A
full-time student is a person who is
enrolled for the number of hours or
courses the school considers to be
full-time attendance.

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School defined. The term “school”
includes elementary schools, junior and
senior high schools, colleges,
universities, and technical, trade, and
mechanical schools. It does not include
on-the-job training courses,
correspondence schools, and schools
offering courses only through the
Internet.
Significant connection. You have a
significant connection to the United
States if:
• You have a permanent home
(defined later) in the United States,
• You are registered to vote in any
political subdivision of the United
States, or
• You have a spouse or child under 18
whose principal home is in the United
States. For this purpose —
1. A spouse does not include a
spouse from whom you are legally
separated under a decree of divorce or
separate maintenance.
2. The child must be your son,
daughter, stepchild, foster child,
adopted child, or a child lawfully placed
with you for legal adoption. But a child
does not include:
a. A child who lives in the United
States with a custodial parent under a
custodial decree or multiple support
agreement, or
b. A child who is in the United
States as a student (defined earlier).
Permanent home. A permanent
home generally includes
accommodations such as a house, an
apartment, or a furnished room that is
available at all times, continuously and
not solely for short stays. However, if
you or your spouse owns the dwelling
unit and rents it to someone else during
the tax year, the dwelling unit is not
your permanent home unless, during
that tax year, you use some part of it for
personal purposes for more than the
greater of:
• 14 days, or
• 10% of the days the property is
rented to others at a fair rental price.
Generally, the rental property is
considered used for personal purposes
on any day it is not being rented to
someone else at fair rental value for the
entire day or is used by you, a family
member, or anyone else who has an
interest in the property. The rental
property is not considered used for
personal purposes on any day on which
the principal purpose for using the
property is to do repair or maintenance
work. For more information on
determining whether the rental property
was used for personal purposes, see
Pub. 570.
Special rule for nonresident aliens.
The presence test does not apply to
nonresident aliens. Instead,
nonresident aliens must meet the
substantial presence test discussed in
chapter 1 of Pub. 519, U.S. Tax Guide

for Aliens. In that discussion, substitute
the name of the possession for “United
States” and “U.S.” wherever they
appear. Also disregard the discussion
in that chapter about a Closer
Connection to a Foreign Country.

Specific Instructions
Unless otherwise specified, answers to
questions seeking information for a tax
year generally refer to the tax year in
which you became (or ceased to be) a
bona fide resident.
Name and social security number
(SSN). If you file a joint return, enter
only the name and SSN of the spouse
whose information is being reported on
Form 8898. If both you and your
spouse are required to file Form 8898,
file a separate Form 8898 for each of
you.

Line 1
Check line 1, box a or b, whichever
applies, and enter the tax year you take
the position that you became or ceased
to be a bona fide resident of a U.S.
possession.
Example. Mr. Grey, a U.S. citizen,
moved from New York to the U.S.
Virgin Islands on March 1, 2011. To
take the position that he became a
bona fide resident of the U.S. Virgin
Islands in 2011, Mr. Grey checks box a
on line 1 and enters ‘‘2011’’ on the line
provided.

Line 2
If you are not a U.S. citizen, you are
either a nonresident alien or resident
alien of the United States. You are
considered a resident alien of the
United States for U.S. tax purposes if
you meet either the green card test or
the substantial presence test for the
calendar year (January 1 through
December 31). If you do not meet
either of those tests, you are
considered a nonresident alien. For
more information about these tests, see
Pub. 519.

Line 4
If you checked line 1, box a, enter on
line 4a the exact date (month/day/year)
you moved to a possession to establish
bona fide residence. If you checked line
1, box b, enter on line 4b the exact date
(month/day/year) you moved from the
possession to end bona fide residence.
Example. Mr. Grey, a U.S. citizen,
moved from New York to the U.S.
Virgin Islands on March 1, 2011. Mr.
Grey would enter “March 1, 2011” on
line 4a.

Line 8
Earned income is wages, salaries,
professional fees, and other amounts

received as compensation for personal
services actually rendered, including
the fair market value of all earnings
paid in any medium other than cash.
Professional fees include all fees
received by an individual engaged in a
professional occupation (such as doctor
or lawyer) in the performance of
professional activities. See chapter 2 of
Pub. 570 for information to determine if
you have any earned income from U.S.
sources.

Lines 12 and 13
See Permanent home, earlier. If you
have more than one home, your
principal permanent home is ordinarily
the permanent home you live in most of
the time.

Line 14
Your immediate family means your
spouse and minor children.

Line 22
Under state law, a homestead
exemption may:
1. Protect the owner of real property
from a forced sale or seizure of the
property from creditors (for example, in
a bankruptcy proceeding), or
2. Provide a reduction in state or
local real property taxes to qualified
homeowners.
In some states, for individuals to
avail themselves of these privileges,
state laws require a designation of the
homestead property, the filing or
recordation of a declaration to make the
exemption operative, or an application
for the homestead tax exemption. If
either of the following apply, answer
“Yes” on line 22 and indicate the state
in which such designation, declaration,
recordation, application, or property tax
exemption was made.
1. You made a designation of
homestead property or otherwise filed
or recorded a declaration concerning
property under a state homestead
exemption law, or
2. You applied for or took a
homestead tax exemption from state or
local property taxes.

Lines 26 and 27
See chapter 2 of Pub. 570 for
information to determine the source of
income.

Line 28
For stocks and bonds, indicate the
country of origin of the stock company
or debtor, and for U.S. companies or
debtors, the state or possession of
incorporation or formation.
For example, if you own shares of a
U.S. publicly-traded Delaware
corporation, the investment is

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considered located in the United States
(that is, Delaware), even though the
shares of stock are stored in a safe
deposit box in a foreign country or
possession.

Line 32
A gain is the amount you realize from a
sale or exchange of property that is
more than its adjusted basis. See Pub.
544, Sales and Other Dispositions of
Assets, for the definitions of amount
realized and adjusted basis.
Special source rules apply to
gains from dispositions of
CAUTION certain property within 10 years
of becoming a bona fide resident of a
U.S. possession. See Special Rules for
Gains From Dispositions of Certain
Property in Pub. 570 for more
information.

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Privacy Act and Paperwork
Reduction Act Notice. We ask for
this information to carry out the Internal
Revenue laws of the United States.
Section 937(c) and its regulations
require that you give us the information.
We need it to determine if you are a
bona fide resident of a U.S.
possession. If you do not provide this
information or provide false information,
you may be subject to penalties. We
may disclose this information to the
Department of Justice for civil and
criminal litigation, and to cities, states,
the District of Columbia, and U.S.
commonwealths and possessions for
use in administering their tax laws. We
may also disclose this information to
other countries under a tax treaty, to
federal and state agencies to enforce
federal nontax criminal laws, or to
federal law enforcement and
intelligence agencies to combat
terrorism.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions
must be retained as long as their
contents may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by Code section 6103.
The average time and expense
required to complete and file this form
will vary depending on individual
circumstances. For the estimated
averages, see the instructions for your
income tax return.
If you have suggestions for making
this form simpler, we would be happy to
hear from you. See the instructions for
your income tax return.

Instructions for Form 8898 (12-2011)