This occurs because, as Puerto Rico is not a state, income derived there is not taxable by the IRS.
If the taxpayer is a US resident with income from Puerto Rico, ensure you answer the question, Are you excluding Puerto Rico income from this tax return? on the Main Information sheet correctly.
Although Puerto Rico income is not taxable, it must be added back when figuring the modified AGI for some credit limits. UltimateTax handles those calculations for you.
If the taxpayer is a Puerto Rico resident filing for extra benefits and US government credits, you will mark the 1040PR check box at the top of the Main Info page. Form W2PR is then used, and it will be checked off. Any normal US forms are not checked because they would not apply if Form 1040PR is the correct form to file.
Note: There is no way to file both Form 1040 and Form 1040PR.
Additional information on Bona Fide Residents of Puerto Rico can be found at: http://www.irs.gov/pub/irs-pdf/p1321.pdf
This information applies to all years of the UltimateTax software.
Solution Articles:
Entering Puerto Rico exclusion of income
1040 PR - Self-Employment Tax Return - Puerto Rico
