1099s for U.S. territories payees (PR/VI/GU/AS/MP)

Puerto Rico (PR), U.S. Virgin Islands (VI), Guam (GU), American Samoa (AS), Northern Mariana Islands (MP)

Step 1 — Classify the payee with documentation

• W-9 = U.S. person (many PR/VI/GU/AS/MP individuals are U.S. citizens).
• W-8 (BEN/BEN-E, etc.) = foreign person.

Step 2 — File the right federal form

If W-9 (U.S. person):

Business payments for services ≥ $600 → File Form 1099-NEC (or other 1099 as applicable).

Apply backup withholding rules if no TIN.

If W-8 (foreign person):

Determine source of income.

U.S.-source FDAP/services in scope → withhold per Ch. 3 (rate may be reduced) and file Form 1042-S.

Foreign-source services (performed outside the U.S.) → typically no 1042-S/withholding; keep documentation of where services were performed.

Key point: The mailing address in a territory doesn’t decide the form—status (W-9 vs W-8) and source of income do.

Puerto Rico 480-series forms: when do they apply?

• PR 480.6SP and related forms are Puerto Rico informative returns tied to PR withholding.
• You typically file them only if you are a PR withholding agent (e.g., you do business in Puerto Rico and pay for services performed in Puerto Rico).
• A stateside business with no PR nexus generally does not file PR 480s merely because the payee lives in PR—use federal 1099/1042-S rules instead.