Guam(p15)

Guam has its own tax system based on the same tax laws and tax rates that apply in the United States.

The addresses and phone numbers listed above are subject to change.

Bona fide residents of Guam are subject to special U.S. tax rules. In general, all individuals with income from Guam will file only one return—either to Guam or the United States.

If you are a bona fide resident of Guam during the entire tax year, file your return with Guam. This applies to all bona fide residents who are citizens, resident aliens, or nonresident aliens of the United States.

• Include income from worldwide sources on your Guam return. In determining your total tax payments, include all income tax withheld by either Guam or the United States, any credit for an overpayment of income tax to either Guam or the United States, and any payments of estimated tax to either Guam or the United States. Pay any balance of tax due with your tax return.
• Generally, if you properly file your return with, and fully pay your income tax to, Guam, then you are not liable for filing an income tax return with, or for paying tax to, the United States. However, if you were self-employed in 2010, see Self-employment tax, later.

Gary Barker was a bona fide resident of Guam for 2010. He received wages of $25,000 paid by a private employer in Guam and dividends of $2,000 from U.S. corporations that carry on business mainly in the United States. He must file a 2010 income tax return with the Government of Guam. He reports his total income of $27,000 on the Guam return.

If you are a bona fide resident of Guam for the entire tax year, file your return and all attachments with the Department of Revenue and Taxation at the address given earlier.

If you have income from sources within Guam and are a U.S. citizen or resident alien, but you are not a bona fide resident of Guam during the entire tax year, file your income tax return with the United States.

• Include income from worldwide sources on your U.S. return. In determining your total tax payments, include all income tax withheld by either the United States or Guam, any credit for an overpayment of income tax to either the United States or Guam, and any payments of estimated tax to either the United States or Guam. Pay any balance of tax due with your tax return. You may also need to complete Form 5074.
  
• You are not liable for filing an income tax return with, or for paying tax to, Guam for the tax year.

If you file a U.S. income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have:

• Adjusted gross income of $50,000 or more for the tax year, and
• Gross income of $5,000 or more from sources within Guam.

The United States and Guam use this form to divide your income taxes.

There is an example of a filled-in Form 5074 in chapter 5.

In certain situations you will not have income from a possession. See De minimis exception under Compensation for Labor or Personal Services in chapter 2.

If you are a citizen or resident alien of the United States but not a bona fide resident of Guam during the entire tax year, send your return and all attachments to:

Department of the Treasury 
Internal Revenue Service Center 
Austin, TX 73301-0215

If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Guam for the entire tax year, you generally must file the following returns.

• A Guam tax return reporting only your income from sources within Guam. In this situation, wages for services performed in Guam, whether for a private employer, the U.S. Government, or otherwise, is income from sources within Guam.
• A U.S. tax return (Form 1040NR) reporting U.S. source income according to the rules for a nonresident alien. See the instructions for Form 1040NR.

If you are not a bona fide resident of Guam during the entire tax year, send your U.S. tax return and all attachments to:

Department of the Treasury 
Internal Revenue Service Center 
Austin, TX 73301-0215

Send your Guam tax return to the Department of Revenue and Taxation at the address given earlier.

If you are a citizen of Guam (meaning that you were born or naturalized in Guam) but not otherwise a U.S. citizen or a U.S. resident alien during the tax year, file your income tax return with Guam. Include income from worldwide sources on your Guam return. Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Pay any balance of tax due with your tax return.

If you are a citizen of Guam, send your return and all attachments to the Division of Revenue and Taxation at the address given earlier.

Special rules apply to certain types of income, employment, and filing status.

If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. If the spouse with the greater AGI is a bona fide resident of Guam during the entire tax year, file the joint return with Guam. If the spouse with the greater AGI is a U.S. citizen or resident alien but not a bona fide resident of Guam during the entire tax year, file the joint return with the United States. For this purpose, income is determined without regard to community property laws.

Bill Whiting, a U.S. citizen, was a resident of the United States, and his wife, a citizen of Guam, was a bona fide resident of Guam during the entire tax year. Bill earned $45,000 as an engineer in the United States. His wife earned $15,000 as a teacher in Guam. Mr. and Mrs. Whiting will file a joint return. Because Bill has the greater AGI, the Whitings must file their return with the United States and report the entire $60,000 on that return.

If you are a member of the U.S. Armed Forces who qualified as a bona fide resident of Guam in a prior tax year, your absence from Guam solely in compliance with military orders will not change your bona fide residency. If you did not qualify as a bona fide resident of Guam in a prior tax year, your presence in Guam solely in compliance with military orders will not qualify you as a bona fide resident of Guam.

If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U.S. Armed Forces), your tax residence is Guam, follow the guidance in the section for bona fide residents under Which Return To File, earlier. However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Guam is from wages or self-employment, you will be taxed on your worldwide income and file only a U.S. tax return (Form 1040) and a state and/or local tax return, if required. If you have income from Guam other than wages or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U.S. tax return.

Generally, expenses of a move to Guam are directly attributable to wages, salaries, and other earned income from Guam. Likewise, the expenses of a move back to the United States are generally attributable to U.S. earned income.

If your move was to Guam, report your deduction for moving expenses as follows.

• If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Guam tax return.
• If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20.

If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26.

Under the filing rules explained earlier, individuals with Guam source income normally will not claim a foreign tax credit on a U.S. income tax return for tax paid to Guam.

If you have no U.S. filing requirement, but have income that is effectively connected with a trade or business in Guam, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax.

To see if you are required to make payments of estimated income tax and/or self-employment tax to the IRS, get Form 1040-ES.

If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return.

If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). For this purpose, income is determined without regard to community property laws.

If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent.

To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:

Internal Revenue Service 
P.O. Box 1300 
Charlotte, NC 28201-1300 
USA

To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www.irs.gov/e-pay.

For information on making estimated income tax payments to the Department of Revenue and Taxation, see Where To Get Forms and Information, earlier.

A mutual agreement procedure exists to settle cases of double taxation between the United States and Guam. See Double Taxation in chapter 4.