IRS Form 4563 – IRS Forms, Instructions, Pubs 2026 – If you’re a bona fide resident of American Samoa navigating U.S. tax obligations, understanding IRS Form 4563 is essential. This form allows eligible individuals to exclude certain income from their gross income, potentially reducing their federal tax liability. Updated as of September 2024, Form 4563 applies to the 2025 tax year and must be attached to your Form 1040 or 1040-SR. In this comprehensive guide, we’ll cover everything you need to know about IRS Form 4563, including eligibility, how to fill it out, and filing tips to ensure compliance.
What Is IRS Form 4563?
IRS Form 4563, titled “Exclusion of Income for Bona Fide Residents of American Samoa,” is a specialized tax document designed for residents of American Samoa. Its primary purpose is to calculate and report the amount of income sourced from American Samoa that can be excluded from your U.S. federal gross income. This exclusion helps prevent double taxation, as American Samoa has its own tax system, and eligible income is typically taxed locally rather than by the IRS.
The form is relatively straightforward, consisting of two parts: General Information (Part I) and Figure Your Exclusion (Part II). It requires details about your residency status, living arrangements, and specific income types that qualify for exclusion. By filing this form, you ensure that only non-excludable worldwide income is reported on your U.S. tax return.
Who Qualifies as a Bona Fide Resident of American Samoa?
To use Form 4563, you must first establish that you are a bona fide resident of American Samoa for the entire tax year. The IRS defines a bona fide resident based on facts and circumstances, including your intent to make American Samoa your permanent home. Key factors include:
- Physical presence in American Samoa for the full year.
- No closer connection to another location (e.g., maintaining a home elsewhere).
- Family ties, voting registration, and community involvement in American Samoa.
Special rules apply for the year you move to or from American Samoa—refer to IRS Publication 570 for details on these transitions. Note that U.S. citizens, residents, and even certain nonresident aliens may qualify if they meet the residency test under Internal Revenue Code Section 937.
However, employees of the U.S. government (civilian or military) cannot exclude wages from federal service, though American Samoa government employees can. Military personnel stationed outside American Samoa but considered bona fide residents may source their compensation to American Samoa under the Servicemembers Civil Relief Act (SCRA).
Eligibility Requirements for Excluding Income
Not all income qualifies for exclusion on Form 4563. To be eligible, your income must be:
- From sources within American Samoa, or
- Effectively connected with the conduct of a trade or business in American Samoa.
Common examples include wages earned for services performed in American Samoa, interest from local banks, dividends from corporations organized there, and gains from real property sales in the territory. Alimony from a bona fide resident of American Samoa is also sourced there.
There are exceptions and cautions:
- De Minimis Rule: Income from temporary services (90 days or less, $3,000 or less) performed by non-residents not connected to local businesses is not sourced in American Samoa.
- Military Spouses: Under the Military Spouses Residency Relief Act (MSRRA), wages or self-employment income for spouses residing in American Samoa solely due to a service member’s assignment are not sourced there.
- Investment Gains: Special rules apply to gains from certain property held within 10 years of becoming a resident—consult Publication 570 to avoid unexpected tax implications.
If you don’t meet these criteria, you must report all worldwide income on your U.S. tax return without exclusion.
Step-by-Step Guide: How to Fill Out IRS Form 4563?
Filling out Form 4563 is a two-part process. Use the latest version (Rev. September 2024) available on the IRS website. Here’s a breakdown:
Part I: General Information
This section verifies your residency status.
- Line 1: Enter the start and end dates of your bona fide residence (e.g., January 1, 2025, to December 31, 2025).
- Line 2: Select your type of living quarters (e.g., rented house or apartment).
- Line 3: Indicate if family lived with you and provide details if yes.
- Line 4: Disclose any homes outside American Samoa, including addresses and occupants.
- Line 5: List your employer or note if self-employed.
- Line 6: Detail any absences from American Samoa, including dates and reasons (e.g., vacation or business travel).
Part II: Figure Your Exclusion
Report only qualifying income here.
- Lines 7-14: Enter amounts by category (e.g., Line 7 for wages, Line 8 for taxable interest). Use source rules from Sections 861-865 and Publication 570 to determine eligibility.
- Line 15: Sum lines 7-14 for your total excludable amount.
Attach Form 4563 to your Form 1040 or 1040-SR. Remember, you cannot claim deductions or credits directly related to excluded income, but you can allocate unrelated ones (e.g., standard deduction) proportionally. Self-employed individuals must still pay self-employment tax on net earnings over $400 via Schedule SE.
How to File IRS Form 4563?
File Form 4563 with your U.S. federal tax return by the due date (typically April 15, 2026, for the 2025 tax year). Mailing addresses vary:
- Without payment: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215 USA.
- With payment: Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303 USA.
If your residency status changes, file Form 8898 to notify the IRS, or face a $1,000 penalty (waivable for reasonable cause). Always keep records to support your claims, as required under the Paperwork Reduction Act.
Additional Tips and Resources for 2026
For complex situations, such as dual-status taxpayers or non-U.S. citizens, review IRS Publication 570, “Tax Guide for Individuals With Income From U.S. Possessions.” This publication provides examples, source rules, and updates. As of February 2026, there are no major changes to Form 4563 beyond the 2024 revision, but check IRS.gov for any announcements.
If you’re self-employed or have investment income, consult a tax professional familiar with territorial taxation to maximize your exclusion while avoiding pitfalls. Remember, excluded income may still impact certain credits or deductions, so plan accordingly.
By properly using IRS Form 4563, bona fide residents of American Samoa can streamline their tax filing and ensure they’re only taxed on applicable income. For the official form and more details, visit the IRS website or download the PDF directly from irs.gov/pub/irs-pdf/f4563.pdf. Stay compliant and save on taxes—file accurately today!