Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Sources of Income

Determining Income Source

Interest Income and Pensions

Residence of Payer

The residence of the payer determines the source of interest income. Interest can come from:

  • Bonds
  • Notes
  • Other interest-bearing obligations of residents, corporations, or otherwise

Puerto Rican residents who receive interest from U.S. bank accounts have U.S. source income.


For pension distributions attributable to contributions, the place where the services were performed that earned the pension is used to determine the source of pension distributions.

For investment earnings on pension contributions, the location of the pension trust is used to determine the source of Investment earnings on pension contributions.

Note: U.S. Social Security Benefits are U.S. source income.

 Source Rules table with interest and pension rows highlighted.