Act 60 for W-2 Employees and Remote Workers: The Honest Answer

Keep the mainland job, work from the beach, salary at 0% — that's the pitch, and none of it survives the rules. Remote W-2 wages for a mainland employer stay U.S.-source and fully U.S.-taxable; the decree's 0% covers investment income. A salary was never in the category.

Why does a W-2 salary stay U.S.-taxed?

Under the federal sourcing rules in IRS Publication 570, service income is sourced where the services are performed — a paycheck doesn't change character because the payee changed addresses. The decree's 0% applies to Puerto Rico–source investment income — gains, dividends, and interest accruing after the move (what the decree covers). Wages are not on that list, at any percentage, and no decree term could reach them: how the U.S. taxes U.S.-source wages is a federal question.

Can remote work put the whole decree at risk?

Yes — this is where the arrangement turns worse than neutral. Remote work for a mainland employer threatens the tax-home test, one of the three federal residency tests the entire decree depends on, every year. A work life anchored to a mainland employer can pull the tax home stateside even while the 183 days are counted faithfully — so the salary isn't just uncovered, it can undermine the residency every dollar of covered income depends on. Over a 15-year decree with annual tests, that is a standing tension, not a one-time hurdle.

Path one: can the work itself change (Chapter 3)?

The first real path runs through the business chapter. Work restructured as a contractor or through one's own entity may qualify under Act 60 Chapter 3 (export services) — a 4% corporate rate on eligible export-services net income, for services performed in Puerto Rico for clients with no Puerto Rico nexus. That takes real presence and substance: an actual business, not a relabeled paycheck. Even inside Chapter 3 the salary rule holds — the owner takes reasonable compensation at ordinary Puerto Rico rates; the 4% applies to the entity's net income, not wages. And Act 38-2026 did not change Chapter 3 — the December 31, 2026 deadline does not apply to it.

Path two: what does a decree still cover for a W-2 worker?

The second path is the income a salaried person may already have: the decree covers Puerto Rico–source dividends, interest, and gains accruing after the move at 0% for applications filed on or before December 31, 2026, 4% after (what the decree covers). For someone with a salary anda meaningful portfolio, a decree can still do real work — on the portfolio side only. The salary keeps its U.S. tax bill either way, and whether the portfolio clears the program's fixed annual costs is its own question (who the program doesn't fit).

Does Act 60 do anything for a salary? Not as a salary. The real questions: can the work become a Chapter 3 business, and does the portfolio clear the floor.