What is the Importance of Income Source?
U.S. citizens and residents are taxed by the United States on their worldwide income, no matter where it originates. For those taxpayers, the source of income is not important. However, for the following taxpayers, the source of income is important:
This lesson focuses on U.S. citizens. All taxpayers referenced are U.S. citizens unless otherwise noted.
Special tax rules apply to nonresident aliens who are bona fide residents of Puerto Rico.