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ceived a salary of $20,000 during that period for

15. Later in the year, however, Bill becomes a

Double taxation. A mutual agreement proce-

his work in Guam, $4,000 in dividends from U.S.

dure exists to settle cases of double taxation

resident of Guam and receives income from

corporations that carry on business mainly in the

between the United States and Guam. See

Guam sources that causes him to refigure his

United States, and $1,000 in interest from de-

Double Taxation under Filing U.S. Tax Returns,

estimated tax payments. The quarterly esti-

posits in U.S. banks. William was advised by the

earlier.

mated tax payments must be made to the United

Guam Department of Revenue and Taxation

States because he was a U.S. resident when his

The Commonwealth of the

that he was not a resident of Guam. He must file

first payment of estimated tax was due. Because

a U.S. tax return. On his U.S. tax return, he

Bill is a resident of Guam at the end of his tax

Northern Mariana Islands

reports the $4,000 of dividends, the $1,000 of

year, he must file his income tax return with

interest, and the $20,000 Guam salary in addi-

Guam. On that return, he claims credit for the

The Commonwealth of the Northern Mariana

tion to any income he had in 2003 before June 1.

estimated tax payments made to the United

Islands (CNMI) has its own tax system based

States.

partly on the same tax laws and tax rates that

Joint return. If you file a joint return, you

apply to the United States and partly on local

should file it (and pay the tax) with the jurisdic-

Early payment of estimated tax. If you

taxes imposed by the CNMI government.

tion where the spouse who has the greater ad-

make your first payment of estimated tax early

justed gross income would have to file (if you

and you do not send it to the jurisdiction to which

Requests for advice about CNMI resi-

were filing separately). If the spouse with the

you should have sent it if you had not made it

dency and tax matters should be ad-

greater adjusted gross income is a resident of

early, make all later payments to the jurisdiction

dressed to:

Guam at the end of the tax year, file the joint

to which the first payment should have been

return with Guam. If the spouse with the greater

made had you not made it early.

Division of Revenue and Taxation

adjusted gross income is a resident of the United

Commonwealth of the Northern

States at the end of the tax year, file the joint

Example. Lauren Post is single and files her

Mariana Islands

return with the United States. For this purpose,

return on a calendar year basis. On March 1,

P. O. Box 5234, CHRB

income is determined without regard to commu-

Lauren was a resident of the United States and

Saipan, MP 96950

nity property laws.

made an early first payment of estimated in-

The telephone number is (670)

come tax to the United States. She became a

Example. Bill White, a U.S. citizen, was a

664 – 1000. The fax number is (670)

resident of Guam before the due date of her first

resident of the United States, and his wife, a

664 – 1015.

payment of estimated tax (April 15), and re-

citizen of Guam, was a resident of Guam at the

mained a resident of Guam for the rest of the

If you are a U.S. citizen with income from the

end of the year. Bill earned $25,000 as an engi-

year. Lauren must make the rest of her pay-

CNMI and the United States, you must file your

neer in the United States. His wife earned

ments of estimated tax to Guam because she is

income tax return with either the CNMI or the

$15,000 as a teacher in Guam. Mr. and Mrs.

a resident of Guam on the date that her first

United States as explained below. Do not file

White will file a joint return. Because Bill has the

payment of estimated tax is otherwise due. At

with both. You are not liable for tax to the juris-

greater adjusted gross income, the Whites must

the end of the year, Lauren will file her tax return

diction with which you do not have to file.

file their return with the United States and report

with Guam and claim credit for all estimated tax

the entire $40,000 on that return.

payments on that return.

If you are a resident of the CNMI on the last

day of your tax year, you should file your return

U.S. military employees. If you are a member

Estimated tax form. If your estimated tax

with the Division of Revenue and Taxation at the

of the U.S. Armed Forces stationed on Guam,

obligation is to the United States, use the work-

address above.

you are not considered a resident of Guam and

sheet in the Form 1040 – ES package to figure

Include income from worldwide sources on

you must file your return with the United States.

your estimated tax, including self-employment

the CNMI return. Include any balance of tax due

However, if you are a member of the military and

tax. If you are paying by check or money order,

with your tax return.

a citizen of Guam, or if you are a civilian em-

use the payment vouchers in the Form 1040-ES

ployee of the military, you are subject to the

package. Or, you can make your payments elec-

If you are a resident of the United States on

same rules described in the previous

tronically and not have to file any paper forms.

the last day of your tax year, you should file your

paragraphs.

See the Form 1040-ES instructions for informa-

return with the Internal Revenue Service Center,

tion on making payments.

Income tax withheld. Take into account tax

Philadelphia, PA 19255 – 0215.

withheld by both jurisdictions in determining if

Include income from worldwide sources on

Information return. If your adjusted gross in-

there is tax due or an overpayment.

the U.S. return. Include any balance of tax due

come from all sources is at least $50,000, your

with your tax return.

Payment of estimated tax. If you have to pay

gross income consists of at least $5,000 from

estimated tax, make your payment to the juris-

sources in Guam, and you file a U.S. income tax

If you are neither a resident of the CNMI

diction where you would file your income tax

return, attach Form 5074 to Form 1040.

nor a resident of the United States at the end

return if your tax year were to end on the date

of your tax year, but you are a citizen of the

your estimated tax payment is first due. Gener-

Note. Guam and the United States have en-

CNMI, you should file with the CNMI Division of

ally, you should make your quarterly payments

tered into an implementing agreement. The ef-

Revenue and Taxation. File with the Internal

of estimated tax to the jurisdiction where you

fective date of the agreement, however, has

Revenue Service Center if you are a citizen of

made your original estimated tax payment. How-

been indefinitely postponed. When the agree-

the United States.

ever, estimated tax payments to either jurisdic-

ment goes into effect, the following rules may

tion will be treated as payments to the

Joint return. If you file a joint return, you

apply.

jurisdiction with which you file the tax return.

should file it (and pay the tax) with the jurisdic-

•

Guam may enact its own laws for taxing

If you make a joint payment of estimated tax,

tion where the spouse who has the greater ad-

residents of Guam as well as for taxing

make your payment to the jurisdiction where the

justed gross income would have to file (if you

income sourced in Guam (or income effec-

spouse who has the greater estimated adjusted

were filing separately). If the spouse with the

tively connected with a trade or business

gross income would have to pay (if a separate

greater adjusted gross income is a resident of

in Guam) and paid to a nonresident.

payment were made). For this purpose, income

the CNMI at the end of the tax year, file the joint

is determined without regard to community prop-

•

return with the CNMI. If the spouse with the

Individuals who are bona fide residents of

erty laws.

greater adjusted gross income is a resident of

Guam and have income sourced outside

the United States at the end of the tax year, file

Guam, the CNMI, or American Samoa

Example. Bill West is single and files his

the joint return with the United States. For this

may have to file a U.S. tax return.

return on a calendar year basis. He is a resident

purpose, income is determined without regard to

•

of the United States at the time that he must

Individuals who are bona fide residents of

community property laws.

make his first payment of estimated income tax

Guam and have income sourced in any of

for the year. Since Bill does not expect to be a

the three possessions may be able to treat

Income tax withheld. Take into account in-

resident of Guam at the end of the year, he pays

that income as exempt from U.S. income

come tax withheld by both jurisdictions in deter-

his estimated tax to the United States by April

tax under the possession exclusion rules.

mining if there is tax due or an overpayment.

Page 6

Publication 570 - Tax Guide For Individuals With Income From U.s. Possessions - 2003 Page 6

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