Income Tax Withheld on Salaries and Wages
An employer is required to withhold income tax at source upon the salaries and
wages paid to its employees performing services in Puerto Rico. In this
connection, employer is required to register its employer’s identification
number with the Puerto Rico Treasury Department by filing Form SC 4809,
Information of Identification numbers.
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 Treasury Department publishes tables for the
determination of the tax to be withheld together with an instruction manual. The
tax is determined by one two methods: the percentage method or the wage bracket
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 as
Employers whose quarterly withholdings have not exceeded $500.00. These
employers are not required to make the monthly deposit; instead, they will pay
said income tax when filing the quarterly return.
New employers and employers who have withheld and reported $50,000 or less
during the lookback period which begins July 1 and ends June 30 of the preceding
year. These employers will be considered monthly depositors and will continue
depositing their income tax not later than the fifteenth (15) day of the month
following the month in which the withholding was made.
Employers who have withheld and reported over $50,000 during the lookback period
which begins July 1 and ends June 30 of the preceding year. These employers will
be considered semiweekly depositors and shall deposit the income tax withheld on
Wednesdays or Fridays, depending on the day the payroll is paid. That is, if the
employer pays the payroll on Wednesday, Thursday or Friday, the deposit must be
made the following Wednesday. However, if the payroll is paid on Saturday,
Sunday, Monday or Tuesday, the deposit must be made the following Friday.
Employers who have withheld $100,000 or more in any day of a deposit period.
These employers shall make the deposit not later than the closing hour of the
The determination of whether an employer is a monthly or semiweekly depositor
will be made annually based on the employer’s tax withholding payment history
during the 12 month lookback period ending on June 30 of the preceding year.
The tax withheld is payable to the Secretary of the Treasury and must be shall
be deposited in any of the banking institutions designated as depositaries of
public funds and authorized as such by the Secretary of the Treasury Payment
should be accompanied with the monthly deposit coupon (Form499R-1) .
The following forms and reports must be filed or used in respect of income taxes
on wages or salaries withheld at source:
- Form 499R-1 (Monthly deposit of income tax withheld) - This form is used to
deposit the taxes withheld during the prior month.
- 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. Any portion of the tax that has not been paid or deposited under
the above rules, must be paid with the quarterly Form 499-R-1B
- Form 499-R-1C (Adjustments to Income Tax Withheld Worksheet).
- 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.
- Form 499R-2c/W-2c PR (Corrected Withholding Statement) This Form is used to
correct wage and tax information.
- 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.