[JOAOVELOSO]

I'm going to spend a semester at the University of Puerto Rico as a Visiting Professor, as a J-1 (non-immigrant) Visa holder. I am a Portuguese citizen and taxpayer. So far, no one was able to explain me how much will be withheld from my biweekly payment. Is there a fixed rate? The contract mentions something like a withhold of 29%, regardless of any possible deductions, family status, a.s.o. (I'm married and I have two children but I'm travelling alone.) It sounds a very high rate to me, according to the idea that we have in Europe about American taxes (which are believed here to be very low indeed). Could someone please give me some detailed information? Does the fact that I am a Portuguese citizen have any importance for this matter? (I've read something about international tax agreements between the States and several foreign countries but I did not understand whether there is such an agreement with Portugal and how I could benefit from that.) Many thanks in advance.

[AtlantaTaxExpert]

You ARE eligible for tax-free status from U.S. INCOME taxes under Article 22 of the U.S.-Portugal Tax Treaty.

However, Puerto Rico imnposes a territorial tax and probably does NOT recognize the tax treaty.

If you wsant to review the treaty yourself, here is the link:

http://www.irs.gov/pub/irs-trty/portugal.pdf

[JOAOVELOSO]

Thank you!
Is there any chance of a similar treaty envolving Puerto Rico?
JV

[AtlantaTaxExpert]

I do not think so, because, as a commonwealth of the United States, I doubt that Puerto Rico negotiates such treaties.

[MukatA]

You should call IRS and find out. Even when you are employed in Puerto Rico you will file federal income tax return. So you should be able to claim treaty deduction.
You will file nonresident tax return and Form 8843.