Physician and Other Individual Decrees: The Same Federal Presence Test Applies

Does a physician decree change the federal presence test?

No. Whatever decree you hold, the federal test for bona fide residency is written for the individual and the tax year. Section 937(a) of the Internal Revenue Code defines a bona fide resident of Puerto Rico as a person who is present for at least 183 days during the taxable year, has no tax home outside Puerto Rico, and has no closer connection to the United States or a foreign country than to Puerto Rico. The 26 CFR 1.937-1 regulation then spells out each test, and neither it nor Publication 570 contains a separate version for physicians or for any other occupation.

This article covers only that residency mechanic. What a given decree provides, and what it asks of you, is outside its scope and belongs with your advisor. The point here is narrower: a decree does not replace the day-by-day facts that the federal tests look at. For the decree-holder angle in general, see the presence test you must meet each year and what did not change about your residency test.

What are the three tests, and how often are they applied?

You qualify as a bona fide resident by passing three tests: the presence test, the tax home test, and the closer connection test. Each is framed "for a taxable year" in the regulation, so the answer is worked out one year at a time. Passing in 2024 does not carry into 2025. Publication 570 says the same: you must be a bona fide resident of Puerto Rico for the tax year.

All three have to be met. A physician with 200 days on the island can still fail the tax home test or the closer connection test. The reverse is also true, which is why the next sections take them one at a time. For the framework in overview, see the three tests together.

There are special rules for the year you move to or from Puerto Rico. Paragraph (f) of the regulation and Publication 570 cover them, and they are worth reading before you assume a partial year works like a full one.

What are the five ways to pass the presence test?

The presence test is the first of the three tests, and a U.S. citizen or resident alien meets it by satisfying any one of five conditions. Paragraph (c)(1) of the regulation lists them, and Publication 570 repeats them in plain language:

1. You are present in Puerto Rico for at least 183 days during the tax year.
2. You are present for at least 549 days over the current year and the two preceding years, with at least 60 days in Puerto Rico in each of those three years. The 549 day test has its own article.
3. You are present in the United States for no more than 90 days during the tax year.
4. Your earned income in the United States does not exceed the section 861(a)(3)(B) amount (Publication 570 gives this as $3,000), and you were present in Puerto Rico for more days than in the United States.
5. You have no significant connection to the United States during the tax year.

Four of these are counted in days. The fifth turns on facts. The regulation defines a significant connection to the United States as any of these: a permanent home in the United States, a current voter registration in a U.S. political subdivision, or a spouse, or a child under 18, whose principal abode is in the United States. The regulation carves out exceptions for some of these, including certain rental property and certain children in school or living with a custodial parent, so read paragraph (c)(5) before you decide a connection does or does not count.

If you work in more than one place, the fourth and fifth conditions are the ones people forget. One condition is enough. You do not need 183 days if the facts support another route.

How does a day get counted?

A day counts as a day in Puerto Rico if you are physically present there at any time during that day. A day in the United States works the same way. The regulation lists narrow exceptions, such as certain days spent outside Puerto Rico for qualifying medical treatment or during a disaster evacuation, and certain U.S. days that are excluded.

Counting has edge cases, and published guidance does not address every same day or in transit situation directly. If your year turns on a particular travel day, get it in writing from a licensed tax professional before you file. The full mechanics are in what counts as a day in Puerto Rico.

How does the tax home test apply to someone who practices?

The tax home test says you had no tax home outside Puerto Rico during any part of the taxable year. Under paragraph (d)(1) of the regulation, your tax home is your regular or principal place of business. If you have none, it is your regular place of abode in a real and substantial sense.

The words "any part of the taxable year" matter. A tax home outside Puerto Rico for even part of the year can defeat the test, so where you actually work and for how long is the question. A physician who keeps a regular practice or a principal place of business off the island is asking a different question from one whose work is based in Puerto Rico. The regulation looks at the facts, not at the label on a license or a decree. For one version of the problem, see what breaks a tax home in the middle of a year.

Whether a particular mix of locations leaves the principal place of business in Puerto Rico is a fact question. The regulation does not give a formula for it, so take your own facts to your advisor.

What does the closer connection test look at?

You pass the closer connection test if, during no part of the taxable year, you had a closer connection to the United States or a foreign country than to Puerto Rico. Paragraph (e)(1) compares your connections to Puerto Rico with the total of your connections elsewhere. Publication 570 lists the kinds of facts that matter: the location of your permanent home, your family, your belongings, your banking, your driver's license, your voter registration, and the forms you file.

This test looks at the whole picture, not a count. Two people with the same day count can land differently. Keeping the evidence in one place helps.

How do you keep the count?

Keep a record made at the time, not one rebuilt later. A contemporaneous day log shows where you were on each date, and it is the foundation for all three tests, because the presence test depends on days and the other two depend on where you lived and worked. Keeping this record by hand is the part people abandon by March. One83 builds it from your calendar so the record exists before anyone asks for it.

The short version

A physician or other individual decree holder faces the same federal tests as anyone else who claims bona fide residency in Puerto Rico: presence, tax home, and closer connection, applied to the individual, for the tax year. The presence test has five routes and any one will do. The other two tests still have to be passed. Anything beyond those mechanics, including what a decree itself requires, goes to your advisor.

Frequently Asked Questions

Does a physician decree change how many days I need in Puerto Rico?

The federal tests in section 937 and 26 CFR 1.937-1 are written for the individual and the taxable year. They do not set a different presence test by occupation or by the kind of decree. This article does not cover decree terms, so check those with your advisor.

Can I pass the presence test with fewer than 183 days?

Yes, if another of the five conditions applies, such as no more than 90 days in the United States, 549 days over three years with at least 60 in each, or no significant connection to the United States. The tax home and closer connection tests still apply.

Does a day working at a mainland hospital count as a day in Puerto Rico?

No. A day counts as a Puerto Rico day when you are physically present in Puerto Rico at any time that day. A day spent only on the mainland is a United States day. How a day split between the two is treated is a point to confirm with a licensed tax professional.

One83 is a tracking tool, not tax advice. Consult a licensed tax professional about your situation.