If you begin or end bona fide residency in a U.S. territory and your worldwide gross income is more than 75,000, the IRS expects Form 8898, on time and complete.
Key Takeaways
- You must file Form 8898 if you start or end bona fide residency in a U.S. territory and your worldwide gross income for that year is over 75,000. Each spouse tests the 75,000 threshold separately.
- File by your Form 1040 due date, including extensions. Do not attach Form 8898 to your tax return. Mail it to IRS Austin or use the IRS online submission the agency added in late 2024.
- The penalty for failing to file, filing late, or submitting incorrect or incomplete info is 1,000, unless you qualify for reasonable cause relief.
- “U.S. possession” is now called “U.S. territory” in IRS materials. Territories include American Samoa, Guam, CNMI, Puerto Rico, and the U.S. Virgin Islands.
- You will answer presence, tax home, and closer connection questions, so keep a clean travel log, copies of leases, bank info, and other tie-breaker evidence. Pub. 570 explains these tests in detail.
What Is IRS Form 8898, And Why It Matters In 2025
Form 8898 is an information return that tells the IRS you became, or ceased to be, a bona fide resident of a U.S. territory. It supports correct tax sourcing and sets clear expectations for your U.S. return and any territory filing. The IRS instructions confirm the filing trigger, the 75,000 income threshold, and the new option to submit the form online.
If you are moving to or from Puerto Rico, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, or the U.S. Virgin Islands, this form is your proof that you told the IRS about the change. Think of it as housekeeping that protects you from avoidable letters and a 1,000 penalty.
2025 Update You Should Not Miss
In October 2024, the IRS updated the Form 8898 instructions. Two practical changes stand out. First, the agency now uses “territory” rather than “possession.” Second, it introduced a mobile friendly version that you can complete and submit online. If you prefer paper, you can still mail it to the Austin address shown below, but do not attach it to your Form 1040.
Who Must File Form 8898
You must file for the tax year in which both are true:
- Your worldwide gross income for the year is more than 75,000, and
- You take the position that you became or ceased to be a bona fide resident of a U.S. territory in that year.
If you are married, do not combine incomes for the threshold. Each spouse decides separately, and if both meet the threshold and residency change, each files their own Form 8898.
Quick Table, Do You Need To File?
| Situation | Income Over 75,000 | Residency Change This Year | Must File 8898 |
| You moved to Puerto Rico and will claim bona fide residency | Yes | Yes | Yes |
| You left Guam and no longer claim bona fide residency | Yes | Yes | Yes |
| You moved to CNMI but will not claim bona fide residency until next year | Yes | No, for this year | No |
| Spouses, both moved, only one earned over 75,000 | One spouse | Both | Only the spouse over 75,000 files |
Source rules and the separate spouse threshold come directly from the IRS.
The Three Tests Behind “Bona Fide Resident”
The form asks about where you lived, worked, and kept your ties, because bona fide residency has three pillars:
- Presence test,
- Tax home test,
- Closer connection test.
Publication 570 explains these in plain detail, with examples and exceptions, including special treatment for certain days and for service members and their spouses.
Presence Test, The Day-Count You Need To Track
You generally satisfy the presence test if any one of these is true for the year:
- You were in the territory at least 183 days, or
- You were in the territory at least 549 days during the current year and two prior years with at least 60 days each year, or
- You were in the United States 90 days or less, or
- You had no more than 3,000 of earned income in the United States and spent more days in the territory than in the United States, or
- You had no significant U.S. connection.
Short medical trips, certain disaster periods, or under 24 hour transit days can be excluded from the U.S. day count, which helps many movers meet the test.
Keep a simple spreadsheet with dates, locations, and reasons for travel. It saves hours later and backs up your answers if the IRS asks.
How To Complete Form 8898, Line By Line Without Headaches
You can finish this in one sitting if you gather a few items first, your travel log, the date you moved in or out, copies of leases or home closings, employer letters, and basic bank and license details. Then walk through each part.
Part I, Your Status And Income
- Line 1, check whether you became or ceased to be a resident, and write the territory’s name.
- Lines 3a and 3b, enter your worldwide gross income for the year, plus the 3 year average if required. The 75,000 threshold is based on your income alone, not your spouse’s.
- Note the “year of move” exceptions in the instructions, which can help you satisfy the tax home and closer connection tests in the year you move in or out, if you meet all listed conditions.
Part II, Dates And Day Counts
- Lines 4a and 4b, enter the exact dates you moved into or out of the territory.
- Lines 5 and 6, report days present in the United States and in the territory. Use your travel log to avoid guesswork. Publication 570 explains which days count and which days you can ignore.
Part III, Tax Home And Closer Connection
Here you summarize ties that show where your life was centered. The IRS looks at things like your permanent home, family, driver’s license, vehicle registrations, voter registration, banks, clubs, and where you say you live on official forms. The instructions list these factors and how they are compared across jurisdictions.
Straight talk, pick a lane and support it with facts. Mixed signals, like a Puerto Rico address but a stateside license and all accounts in the U.S., slow reviews and invite follow up questions.
Part IV, Your Addresses
You will list your addresses before and after the change, along with employer details if relevant. Double check spelling and apartment numbers. Small typos create mail delays you do not need.
Evidence Pack, What To Keep In Your Files
Make your own mini dossier. If the IRS ever asks, you will be glad you did.
- A calendar or spreadsheet with every day of the year, marked US or territory.
- Lease or closing documents, utility bills, and move confirmations.
- Territory driver’s license, voter card, and vehicle registrations.
- Bank statements showing local accounts and activity.
- Employment records showing where you worked and for whom.
- Copies of territory tax returns, if required.
- Notes on school, church, or community ties that support closer connection.
These items mirror what the IRS cites as significant contacts and what Publication 570 uses in examples.
Filing Deadlines, Where To Send It, And Your Options
File Form 8898 by the same due date as your Form 1040, including extensions. The IRS says not to attach Form 8898 to your return. Mail it to the Austin campus at the address below, or use the online submission option the IRS introduced with the October 2024 update.
Do not put Form 8898 in the same envelope as your tax return. The IRS lists a separate address and warns against combining them.
Mailing Address And Private Delivery
- Mailing address on the instructions, Internal Revenue Service, 3651 S. IH 35, MS 4301 AUSC, Austin, TX 78741.
- If you use a private delivery service, the IRS posts street addresses for campuses. Austin’s street address is 3651 S IH35, Austin, TX 78741. Match your service’s label to the IRS list.
For internal processing references, the Austin site uses Mail Stop 4301 AUSC for forms like 8898, which you will see echoed in IRS internal manuals and in the public instructions.
Online Submission
The IRS now offers a mobile friendly version that you can complete and submit online. If you prefer a paper trail, print a copy for your records after you submit. The instructions page links to the tool.
Penalties, Reasonable Cause, And How To Avoid Problems
The civil penalty is 1,000 if you are required to file and you fail to file, file late, or submit missing or incorrect information. The IRS allows reasonable cause relief when facts show you tried to comply and the error was not willful. Keep records and fix issues quickly to improve your odds.
If you discover a mistake, correct it fast. A timely fix, supported by evidence, is your best defense for reasonable cause.
Common Mistakes We See
- Counting travel days from memory instead of a log, which misstates the presence test. Pub. 570 has examples that show how special days are counted.
- Assuming a spouse’s income counts for the 75,000 threshold. It does not. Each spouse tests separately and, if required, files separately.
- Mailing Form 8898 with the 1040. The IRS asks you not to do that.
- Using a wrong campus address for private delivery. Use the current IRS PDS street list.
Year-Of-Move Exceptions Many People Miss
The instructions include special “year of the move” rules that help you satisfy the tax home and closer connection tests when you move into a territory, and a separate set when you move out. You must meet every condition listed for your situation. If you miss one, you fall back to the standard tests. The instructions spell out both the inbound and outbound versions, and a Puerto Rico specific outbound rule.
Quick Examples
- Moving in, you were not a bona fide resident in the prior three years, you had no tax home or closer connection outside the territory during the last 183 days of the move year, and you remain a bona fide resident for the next three years, then you meet the exception.
- Moving out of American Samoa, CNMI, Guam, or USVI, you were a bona fide resident for the prior three years, you had no outside tax home or closer connection during the first 183 days of the move year, and you do not return as a bona fide resident in the next three years, then you meet the exception.
- Leaving Puerto Rico midyear has its own rule. If you are a U.S. citizen, were a bona fide resident for at least two prior years, and meet the listed conditions, you are treated as a Puerto Rico bona fide resident for the part of the move year before you left.
Presence Test, Tax Home, Closer Connection, A Practical Checklist
- Presence, confirm you meet one of the five options in Pub. 570 for the year, and support it with your day log.
- Tax home, show where you regularly worked or, if not working, where you regularly lived. Special rules exist for students, elected officials, and seafarers.
- Closer connection, align your facts, home, family, licenses, banking, memberships, and mailing address, with the territory. Mixed facts weaken the case.
Step-By-Step Filing Flow
- Confirm you meet the filing trigger for the tax year.
- Gather evidence and day counts.
- Complete Parts I through IV carefully.
- Sign the form.
- Submit online through the IRS tool or mail it to the Austin address. Do not attach it to your 1040.
- Save a copy of everything.
If You Are Using A Private Delivery Service
Use the IRS PDS street address list and label Austin correctly. Some carriers require a street address and will not accept a mail stop line. The IRS keeps an updated list, use the Austin line that matches your carrier’s template.
Frequently Asked Questions
Who actually needs to file Form 8898?
Anyone who became or ceased to be a bona fide resident of a U.S. territory during the year and whose worldwide gross income exceeded 75,000. If both spouses qualify, each files a separate form.
Can I e-file Form 8898?
Yes. The IRS added a mobile friendly online submission in October 2024. You can still mail a paper form if you prefer, just do not attach it to your 1040.
Where do I mail Form 8898?
Internal Revenue Service, 3651 S. IH 35, MS 4301 AUSC, Austin, TX 78741. For private delivery services, use the IRS list of street addresses, Austin is shown as 3651 S IH35, Austin, TX 78741.
What is the penalty if I forget?
The civil penalty is 1,000 for failing to file, filing late, or filing an incomplete or incorrect form, unless you show reasonable cause.
What counts as “worldwide gross income”?
All income before deductions, credits, or rebates, from U.S. and non U.S. sources. The instructions define it broadly.
How do the presence, tax home, and closer connection tests work?
Publication 570 explains the five ways to satisfy presence, how to set your tax home, and how the IRS compares your ties to decide closer connection. The form’s Part III mirrors those factors.
I moved midyear. Do special rules apply?
Yes. The instructions include “year of move” exceptions for inbound and outbound moves, plus a Puerto Rico specific outbound rule. Review the conditions, you must meet all of them.
Do I file Form 8898 with my return?
No. File 8898 by the 1040 due date, including extensions, but do not attach it to your return. Submit online or mail separately.
Related Forms And Resources
- Form 8898 instructions page, for the latest address, definitions, and online submission option.
- Publication 570, chapter 1, for presence, tax home, closer connection, and examples.
- IRS PDS street addresses, if you are using a private carrier.
Handy Prep Table
| Task | What To Do | Proof To Keep |
| Track travel days | Maintain a daily log for the entire year | Calendar, airline receipts |
| Align ties | License, voter registration, bank accounts in the territory | Copies of cards and statements |
| Confirm threshold | Add up worldwide gross income for the year | Year end pay stubs, 1099s |
| File the form | Submit online or mail to IRS Austin by your 1040 due date | Copy of submission or mailing receipt |
Final Thoughts, And A Quick Note For Firms
If you get Form 8898 right, you reduce letters, penalties, and noise. Use your calendar, pick consistent ties, and submit on time. If you are an accounting firm that handles possession moves or Act 60 clients and you want help with day count worksheets, workpaper standardization, and Form 8898 quality control at scale, Accountably can support your internal team with disciplined, review friendly production inside your systems. Keep client control, raise confidence, and cut rework.