Before taking the Section 933 Exclusion for exempt PR income, be sure you have first reported the earned Puerto Rican sourced income so that the exclusion is reducing the applicable amount. To first report the Puerto Rican sourced income on Form 1040 from the Income menu go to “Other Income” > “Other Income Not Reported Elsewhere”. Enter the description as “Puerto Rican Earned Income” and then the dollar value. Once these steps have been taken, use the steps outlined below to claim the Section 933 Exclusion.
(1) Navigate to the Income Section
(2) Click begin on the Other Income Line
(3) Click Begin on the Compensation Line located on the Less Common Income menu
(4) Select Begin on the Section 933 Excluded Income from Puerto Rico
(5) Answer the Bona Fide Resident question
(6) Answering Yes displays an entry that allows you to enter the amount to exclude. Enter the amount and click Continue
(7) If you need to itemize deductions, navigate to Itemized Deductions. The screen will display the percentage amount that you can enter for each item based on the income exclusion
(8) The excluded amount will be subtracted on Line 21
blog posted 02/21/2018