Income Tax Withheld on Salaries and Wages

Under Section 1141 of the  Puerto Rico Internal Revenue Code of 1994, the employer is required to withhold income tax at source upon the salaries and wages paid to its employees performing services in Puerto Rico.  The employer is required to file an  Application for Employer Account Number, Form SC 4809, with:

Department of Treasury
Box S4515
Old San Juan
San Juan, P.R.  009054515

The withholding rates depend upon the personal  exemption and credits for dependents claimed in the withholding exemption certificate (Form 499R4l) to be completed by every employee.  The Secretary of the Treasury has issued tables for the determination of the tax to be  withheld included in an instruction manual.

There is no wage limitation for the withholding.  Every employer having one or more employees should withhold the tax.  The tax withheld should be deposited  following the same rules for FICA deposits.

The tax withheld is payable to the:

Secretary of the Treasury
P.O. Box 2501
San Juan, Puerto Rico 00903

Payment should be accompanied with the monthly deposit coupon.

 The following forms and reports should be filed or used in relation to income taxes withheld at source:

1. Form 499R-1 (Monthly deposit of income tax withheld)  this form is used to deposit the taxes withheld during the prior month. 

2. Form 499-R-1B (Employer's Quarterly Return of Income Tax Withheld) - This  return must be filed on or before April 30, July 31, October 31 and January 31 of each year.  The portion of the tax, which has not been paid or deposited, must accompany same.

 3. Form 499-R-1C (Adjustments to Income Tax Withheld Worksheet)

4. Form 499R2/W2PR  (Withholding Statement) - This withholding statement is the Puerto Rico equivalent of the U.S. Form W2 and should be prepared for  every employee.  The form comes in with five copies.  The original of this Form, together with Form W3PR, shall be filed with the Social Security Administration not later than the last day of February following  the end of the calendar year for which the withholding was performed.  Copy A, together with Form 499R3 shall be filed with the Bureau of Income Tax not later than January 31 following the end of the calendar  year.  Copies B and C are for the employees. Copy D is for the employer's records.

5. Form 499R-2c/W-2c PR (Corrected Withholding Statement) This Form is used to correct wage and tax information.

6. Form 499R3  (Annual reconciliation statement)  This form is the conciliation statement that should be filed with the Secretary of the Treasury on or before January 31 of every year accompanied with copy A of Form 499R2/W2PR.   The form should include the figures of tax withheld for the prior calendar year.

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