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US Expat Taxes in Guam

Guam occupies a unique position in the US tax world: an unincorporated US territory whose residents are US nationals (and if born there, US citizens), yet Guam operates its own separate income tax system distinct from the IRS. The foundation is the Guam Territorial Income Tax (GTIT), established by the Organic Act of Guam (48 U.S.C. § 1421h). The GTIT mirrors the Internal Revenue Code — same rates, brackets, deductions, and credits — but taxes are paid to the Guam Department of Revenue and Taxation (Guam DRT, P.O. Box 2950, Hagatna, GU 96932) rather than the IRS. Three federal statutes form the backbone of Guam's tax coordination. IRC Section 935 governs filing obligations — bona fide Guam residents for the full year file only with Guam DRT. IRC Section 937 defines 'bona fide resident' and establishes the three-part test. 26 U.S.C. Section 7654 governs the cover-over mechanism transferring certain federal taxes to the Guam Treasury — primarily taxes from military and federal civilian employees, totaling $111 million+ annually (roughly 20-25% of Guam's general fund revenue). ## The Three-Part Bona Fide Residency Test Under IRC Section 937, bona fide residence in Guam requires satisfying all three parts for the entire taxable year: **(a) The 183-Day Presence Test.** Physical presence in Guam for at least 183 days during the year. Alternative: 549 days over three consecutive years (minimum 60 days each year). Under either path, no more than 90 days in the 50 US states and DC. **(b) The Tax Home Test.** Your tax home — principal place of business or regular place of abode — must be in Guam for the full year. You cannot maintain a tax home outside Guam. **(c) The Closer Connection Test.** No closer connection to the US or any foreign country than to Guam, evaluated by permanent home location, family ties, voter registration, driver's license, bank accounts, and social/economic ties. Failing any part means Section 935's simplified filing does not apply — you face dual-filing with both the IRS and Guam DRT. ## Key Tax Forms for Guam Filers **Guam Form 1040.** Bona fide residents file this mirror-code return with Guam DRT, reporting all worldwide income. **Form 5074 — Allocation of Individual Income Tax to Guam.** Required for non-bona-fide residents with Guam-source income if AGI is $50,000+ and Guam-source income is $5,000+. Filed with federal Form 1040 to allocate a portion of federal tax liability to Guam DRT. **Form 8898 — Statement for Individuals Who Begin or End Bona Fide Residence in a US Possession.** Filed with the IRS when establishing or terminating Guam residency if worldwide gross income is $75,000+. Information return only — $1,000 penalty for failure to file. Due with your income tax return (including extensions). **Form 1040-SS — Self-Employment Tax Return.** Bona fide Guam residents who are self-employed file this with the IRS (not Guam DRT) for self-employment tax. One of the few cases where BFR residents still file with the IRS. Applies to net SE earnings above $400 at 15.3% (12.4% SS up to $176,100 wage base for 2026, plus 2.9% Medicare on all SE earnings, plus 0.9% Additional Medicare Tax above $200,000 single). **Form 941-SS — Employer's Quarterly Federal Tax Return.** Guam employers use this to report FICA payroll taxes quarterly to the IRS: 6.2% employer + 6.2% employee for Social Security, 1.45% + 1.45% for Medicare (15.3% combined total). ## Guam-Source Income Defined Under IRC Section 937(b), Guam-source income includes: (1) compensation for services physically performed in Guam; (2) rental income from Guam real property; (3) income from businesses operating in Guam; (4) gains from sale of Guam real property; (5) dividends/interest from Guam corporations attributable to Guam operations. Passive investment income (US stocks, mutual funds) is generally not Guam-source even if received while physically in Guam. ## FICA, Self-Employment Tax, and Payroll Guam participates fully in US Social Security and Medicare. FICA rates match the mainland: 6.2% + 6.2% SS (up to $176,100), 1.45% + 1.45% Medicare (no cap), 0.9% Additional Medicare Tax above $200,000/$250,000. Employers file Form 941-SS quarterly with the IRS. Self-employed residents pay 15.3% SE tax on net earnings above $400 via Form 1040-SS. ## Credits Not Available to Bona Fide Guam Residents Bona fide Guam residents cannot claim: the Earned Income Credit (EIC), Additional Child Tax Credit (ACTC), Credit for Other Dependents, or American Opportunity Tax Credit (AOTC). A family qualifying for $7,000+ in EIC on the mainland receives $0 in Guam. Guam has periodically enacted local earned income credit programs, subject to annual appropriation. ## Section 30 Cover-Over Under 26 U.S.C. Section 7654, the US Treasury covers over to Guam certain federal income taxes — primarily from military and federal civilian employees who file with the IRS rather than Guam DRT. The annual amount exceeds $111 million, representing 20-25% of Guam's general fund revenue. ## Estate and Gift Tax Guam imposes no territorial estate or gift tax. However, US citizens (including Guam BFR residents) remain subject to federal estate and gift tax on worldwide assets. The 2026 federal estate tax exemption is $13.99 million per individual. Gifts exceeding $19,000 per recipient annually require Form 709. Military personnel stationed in Guam retain home-state domicile under the SCRA and file federal returns with the IRS. Their withheld taxes are covered over to Guam under Section 7654. The FEIE does not apply to Guam income. No FBAR or FATCA applies to Guam accounts.

Tax Treaty Information

No Tax Treaty
  • Guam is a US territory — it is NOT a foreign country and has no separate income tax treaty with any nation
  • Guam's income tax system is governed by the Guam Territorial Income Tax (GTIT) under 48 U.S.C. § 1421h, which mirrors the Internal Revenue Code
  • IRC Section 935 coordinates federal and Guam filing obligations — bona fide Guam residents for the full year file only with Guam DRT, not the IRS
  • IRC Section 937 defines 'bona fide resident' of a US possession and establishes the three-part residency test (presence, tax home, closer connection)
  • 26 U.S.C. Section 7654 governs the cover-over of federal taxes to the Guam Treasury, including taxes withheld from military and federal employees ($111M+ annually)
  • US income tax treaties apply through the US, not directly through Guam — treaty positions taken by Guam-source entities rely on the US treaty network
  • No US-Guam Totalization Agreement exists because Guam participates in the US Social Security system directly; Guam wages are subject to FICA taxes (12.4% SS + 2.9% Medicare = 15.3%) the same as mainland wages
  • The Foreign Earned Income Exclusion (Form 2555) does not apply to Guam-source income, as the FEIE applies only to income earned outside the US and its territories

FBAR & FATCA Requirements

Guam is a US territory. Financial accounts held in Guam — bank accounts at Bank of Guam, First Hawaiian Bank, etc. — are NOT foreign accounts for FBAR purposes. FinCEN Form 114 (FBAR) applies only to accounts at foreign financial institutions in foreign countries; Guam is a US territory and does not qualify as a foreign country. Similarly, FATCA Form 8938 does not apply to Guam accounts. Guam residents with truly foreign accounts (in Japan, the Philippines, or other foreign countries) must still report those on FBAR if the $10,000 aggregate threshold is met.

Foreign Earned Income Exclusion (FEIE)

The Foreign Earned Income Exclusion does not apply to income earned in Guam. The FEIE under IRC Section 911 is specifically available for income earned in foreign countries — Guam is a US territory, not a foreign country. Bona fide residents of Guam exclude their Guam-source income from US federal taxation differently: Section 935 directs that their income tax obligation is to the Guam DRT, not the IRS. The practical result is similar — Guam-source income is not subject to federal income tax — but the legal mechanism is entirely different from the FEIE.

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Common Tax Issues in Guam

  • 1Bona fide residency and the three-part test under IRC Section 937: to file exclusively with Guam DRT under Section 935, you must satisfy all three parts of the bona fide residency test for the entire taxable year. Part (a) requires physical presence in Guam for at least 183 days (or 549 days over three consecutive years with a minimum of 60 days per year), with no more than 90 days in the 50 US states and DC. Part (b) requires your tax home to be in Guam for the full year. Part (c) requires that you have no closer connection to the US or any foreign country than to Guam. Failing any one part means you are not a bona fide resident and must potentially file with both the IRS and Guam DRT
  • 2Guam Income Tax Return vs Form 1040 — who files where: bona fide Guam residents for the full year file only with Guam DRT (using the Guam version of Form 1040). Non-bona-fide residents with Guam-source income must file Form 5074 with their federal Form 1040 if their AGI is $50,000+ and they have $5,000+ of Guam-source income. Form 5074 allocates a portion of federal tax liability to Guam. Anyone who begins or ends bona fide residency in Guam during the year must also file Form 8898 with the IRS if worldwide gross income is $75,000 or more — the penalty for failing to file Form 8898 is $1,000
  • 3Military personnel stationed in Guam: under the Servicemembers Civil Relief Act, active duty military members generally maintain domicile in their home state regardless of where they are stationed. A service member stationed at Andersen AFB or Naval Base Guam typically remains domiciled in their home state, files a federal return with the IRS, and owes state income tax to their home state — not Guam income tax. Federal income taxes withheld from their pay are covered over to the Guam Treasury under 26 U.S.C. Section 7654. Military spouses may have additional options under the Military Spouses Residency Relief Act
  • 4Part-year Guam residents — dual filing: individuals who live in Guam for only part of the year (including federal contractors who rotate on and off island) must file both with the Guam DRT (for Guam-source income during the Guam period) and with the IRS (for non-Guam income). Form 5074 is used to allocate income tax between jurisdictions. Additionally, Form 8898 must be filed with the IRS for the year in which bona fide residency begins or ends if worldwide gross income is $75,000+. Income apportionment can be complex and a tax professional experienced with both Guam DRT and IRS requirements is strongly recommended
  • 5Federal employees in Guam: civilian federal employees working for the US government in Guam face specific rules — their federal wages may be subject to federal income tax rather than Guam income tax, depending on their domicile and the source of their compensation. Federal income taxes withheld from these employees are covered over to the Guam Treasury under Section 7654 (the 'Section 30 cover-over'), returning over $111 million annually to Guam's general fund. IRS Publication 570 (Tax Guide for Individuals in US Possessions) provides detailed guidance
  • 6Guam Business Privilege Tax (BPT): Guam levies a 5% Business Privilege Tax on the gross receipts of businesses, functioning as its consumption tax (similar to a sales tax or VAT). The rate drops to 4% effective October 1, 2026, as enacted by Guam Public Law. BPT returns are filed monthly with the Guam DRT, and the tax applies to virtually all business activity conducted on Guam, including services, sales of tangible property, and rentals. Self-employed individuals must account for BPT in addition to income tax and self-employment tax obligations
  • 7Earned Income Credit and other refundable credit restrictions: bona fide Guam residents filing with the Guam DRT cannot claim the federal Earned Income Credit (EIC), the Additional Child Tax Credit (ACTC), the Credit for Other Dependents, or the American Opportunity Tax Credit (AOTC). These credits are not available on the Guam territorial return. For a family that would otherwise qualify for $7,000+ in EIC on the mainland, the financial impact of Guam residency is significant. Guam has occasionally enacted its own local earned income credit, but availability depends on annual appropriation by the Guam Legislature
  • 8FICA and payroll obligations in Guam: Guam wages are subject to FICA at the same rates as mainland wages — 6.2% employee + 6.2% employer for Social Security (on wages up to the $176,100 wage base for 2026) and 1.45% employee + 1.45% employer for Medicare (no wage cap), for a combined employer-employee total of 15.3%. The 0.9% Additional Medicare Tax applies to wages above $200,000 (single) or $250,000 (MFJ). Guam employers file Form 941-SS quarterly with the IRS to report FICA obligations
  • 9Self-employment tax for Guam residents: bona fide Guam residents who are self-employed must file Form 1040-SS with the IRS to report self-employment tax (Social Security and Medicare). This is one of the few situations where a bona fide Guam resident files directly with the IRS. SE tax applies to net self-employment earnings above $400 at a rate of 15.3% (12.4% Social Security up to the wage base + 2.9% Medicare on all net SE earnings + 0.9% Additional Medicare Tax above $200,000). The deductible portion of SE tax (50% of the SE tax paid) is claimed on the Guam Form 1040
  • 10Defining Guam-source income: under IRC Section 937(b), income is Guam-sourced if it arises from: (1) personal services physically performed in Guam; (2) rental income from real property located in Guam; (3) a trade or business operated in Guam; (4) gains from the sale of Guam real property; or (5) dividends and interest from Guam corporations to the extent attributable to Guam operations. Passive investment income (US stocks, mutual funds) is generally not Guam-source even if received while physically present in Guam. This distinction is critical for Form 5074 allocations
  • 11Estimated tax and quarterly payments: bona fide Guam residents with income not subject to withholding (self-employment income, rental income, investment income) must make quarterly estimated tax payments to the Guam DRT. Payment due dates mirror the federal schedule: April 15, June 15, September 15, and January 15 of the following year. Underpayment penalties apply if you owe $1,000 or more and have not paid at least 90% of current-year tax or 100% of prior-year tax (110% if AGI exceeds $150,000). Payments can be made electronically via the Guam DRT e-filing portal at myguamtax.com or by check payable to 'Government of Guam'

Filing Deadlines

Regular FilingApril 15 (Guam DRT return for bona fide residents; IRS return for non-residents with US income). Taxpayers outside the US and Guam on April 15 receive an automatic extension to June 15 for filing (but not for payment — interest accrues from April 15)
ExtensionOctober 15 (6-month extension available by filing Form 4868 or its Guam equivalent by April 15; Form 8898 is also due by the extended due date if applicable)
FBAR DeadlineNot applicable — Guam accounts are not foreign accounts. However, Guam residents with foreign accounts (Japan, Philippines, etc.) must still file FBAR by April 15 with automatic extension to October 15

Local Tax Rates

Income Tax

Mirror of US federal rates: 10%, 12%, 22%, 24%, 32%, 35%, 37% (same brackets as federal, adjusted for inflation)

Capital Gains

Mirror of US federal capital gains rates: 0%, 15%, or 20% depending on taxable income

VAT/GST

5% Business Privilege Tax (BPT) on gross receipts of businesses — dropping to 4% effective October 1, 2026. Not a traditional VAT but functions as Guam's primary consumption tax

Local Resources

Guam Department of Revenue and Taxation (Guam DRT)

Guam's territorial tax authority — file your Guam income tax return here, not with the IRS, if you are a bona fide Guam resident. E-filing available through the myguamtax.com portal. Mailing address: P.O. Box 2950, Hagatna, GU 96932. Payments by check payable to 'Government of Guam' or electronic funds transfer via the DRT portal. Expect 4-6 week processing for e-filed returns

IRS Publication 570 — Tax Guide for Individuals in US Possessions

Official IRS guidance covering tax rules for residents of and individuals with income from Guam and other US territories, including Section 935 coordination and Form 5074 instructions

IRS International Taxpayers — US Territories

IRS resources for US citizens with filing obligations in multiple jurisdictions, including guidance on bona fide residence tests under Section 937

Form 5074 — Allocation of Individual Income Tax to Guam

IRS form for non-bona-fide Guam residents with $50,000+ AGI and $5,000+ Guam-source income to allocate federal tax liability to Guam

Form 8898 — Statement for Individuals Who Begin or End Bona Fide Residence in a US Possession

Required IRS information return for anyone establishing or terminating Guam bona fide residency with $75,000+ worldwide gross income. $1,000 penalty for failure to file

Form 1040-SS — Self-Employment Tax Return

Filed with the IRS by self-employed bona fide Guam residents to report Social Security and Medicare self-employment tax on net SE earnings above $400

Frequently Asked Questions: US Taxes in Guam

Do I file my taxes with the IRS or with the Guam Department of Revenue and Taxation?
The answer depends on your residency status. If you are a bona fide resident of Guam for the entire calendar year (satisfying all three parts of the Section 937 test — the 183-day presence test, the tax home test, and the closer connection test), you file only with the Guam Department of Revenue and Taxation (Guam DRT) under IRC Section 935 — not with the IRS. The Guam Territorial Income Tax mirrors the federal tax code in rates and structure, but the tax is paid to Guam's government, not Washington. If you are not a bona fide Guam resident for the full year, or if you have income from both Guam and the US mainland, you may be required to file both a Guam DRT return and a federal IRS return, using Form 5074 to apportion income between the two. IRS Publication 570 covers these rules in detail.
What is Section 935 and how does it affect Guam taxpayers?
IRC Section 935 is the federal statute that governs the coordination of US federal income tax obligations and Guam income tax obligations. Under Section 935, bona fide residents of Guam for the entire taxable year satisfy their US income tax obligation by filing a return with the Guam DRT and paying the Guam Territorial Income Tax — they do not separately file a Form 1040 with the IRS. Section 935 works in conjunction with IRC Section 937 (which defines bona fide residence) and 26 U.S.C. Section 7654 (which governs the cover-over of federal taxes to Guam). Non-residents of Guam who have Guam-source income, and part-year residents, are not covered by this election and face different (often more complex) dual-filing rules using Form 5074.
How is Guam's tax system different from the US federal tax system?
Guam's Territorial Income Tax (GTIT) is a mirror image of the Internal Revenue Code: the same tax rates, brackets, standard deductions, itemized deduction rules, and credits apply in Guam as on the US mainland. The key differences are: (1) taxes are paid to the Guam DRT, not the IRS; (2) Guam retains the revenue for its own budget; (3) Guam has its own Business Privilege Tax (currently 5% on gross receipts, dropping to 4% effective October 1, 2026) as a consumption tax; (4) bona fide Guam residents cannot claim the Earned Income Credit, Additional Child Tax Credit, Credit for Other Dependents, or American Opportunity Tax Credit; and (5) certain local credits and incentive programs exist only in Guam, including qualified investment credits for businesses under Guam's economic development programs.
I am in the military stationed in Guam. Where do I file my taxes?
Under the Servicemembers Civil Relief Act (SCRA), active duty military members retain their domicile in their home state regardless of where they are assigned. A service member who is domiciled in, say, North Carolina and stationed at Andersen Air Force Base or Naval Base Guam is still considered a North Carolina resident for tax purposes. They would typically file a federal Form 1040 with the IRS and a North Carolina state return — not a Guam income tax return. The federal income taxes withheld from their pay are covered over to the Guam Treasury under 26 U.S.C. Section 7654, ensuring Guam receives the revenue. Military spouses may have additional protections under the Military Spouses Residency Relief Act allowing them to maintain their home-state domicile.
Are Guam bank accounts reportable on FBAR?
No. FBAR (FinCEN Form 114) requires reporting only of accounts held at financial institutions in foreign countries. Guam is a US territory — not a foreign country — so bank accounts at Guam-based financial institutions (Bank of Guam, First Hawaiian Bank, etc.) are domestic accounts for FBAR purposes and do not need to be reported. However, if you have accounts in truly foreign countries — Japan, the Philippines, South Korea, or elsewhere — those remain FBAR-reportable if the aggregate exceeds $10,000 at any point during the year.
Does the Foreign Earned Income Exclusion apply to income earned in Guam?
No. The FEIE (Form 2555) applies only to income earned in a foreign country. Guam is a US territory, not a foreign country. The tax benefit for bona fide Guam residents comes through Section 935: their income tax is paid to Guam DRT rather than the IRS, keeping Guam-source income out of the federal tax base. The result is similar to the FEIE but the legal mechanism is entirely different.
Does Guam pay federal taxes?
Bona fide Guam residents do not pay federal income tax to the IRS — they pay the Guam Territorial Income Tax to the Guam DRT at identical rates and brackets as the federal code. However, Guam residents do pay federal payroll taxes: FICA (Social Security at 12.4% combined employer-employee and Medicare at 2.9%) applies to all Guam wages exactly as on the mainland. Self-employed Guam residents pay self-employment tax at 15.3% via Form 1040-SS filed with the IRS. Additionally, federal excise taxes apply in Guam, and the US Treasury covers over federal income taxes withheld from military and federal civilian employees to the Guam Treasury under 26 U.S.C. Section 7654.
What is Form 5074 and who needs to file it?
Form 5074 (Allocation of Individual Income Tax to Guam) is required for US citizens or residents who are NOT bona fide residents of Guam but who have Guam-source income. You must file Form 5074 attached to your federal Form 1040 if your adjusted gross income is $50,000 or more AND you have at least $5,000 of Guam-source income. The form calculates the portion of your federal income tax liability allocable to Guam-source income. That amount is then paid to the Guam DRT instead of the IRS. Guam-source income includes compensation for services performed in Guam, rental income from Guam property, and income from businesses operating in Guam.
Can I claim the Earned Income Credit if I live in Guam?
No. Bona fide Guam residents filing the Guam territorial income tax return with the Guam DRT cannot claim the federal Earned Income Credit (EIC). The Additional Child Tax Credit (ACTC), Credit for Other Dependents, and American Opportunity Tax Credit (AOTC) are also unavailable on the Guam return. For a family with two qualifying children that would receive $7,000+ in EIC on the mainland, this is a substantial financial difference. Guam has occasionally enacted a local earned income credit through territorial legislation, but availability varies by year and depends on appropriation by the Guam Legislature. Check with the Guam DRT or a local tax professional for current-year availability.
Do I need to file Form 8898 when moving to or from Guam?
Yes, if your worldwide gross income for the year is $75,000 or more. Form 8898 (Statement for Individuals Who Begin or End Bona Fide Residence in a US Possession) must be filed with the IRS for the taxable year in which you establish or terminate bona fide residence in Guam. It is an information return — it does not generate a tax liability — but the penalty for failure to file is $1,000. Form 8898 is due with your income tax return (including extensions, so October 15 if you file for an extension). You should file Form 8898 even if you believe you may not technically meet the bona fide residence threshold, to avoid the penalty and put the IRS on notice of your residency change.
What are FICA obligations for employers and employees in Guam?
Guam wages are subject to FICA at the same rates as mainland wages: 6.2% employee share + 6.2% employer share for Social Security (on wages up to $176,100 for 2026) and 1.45% employee + 1.45% employer for Medicare (no wage cap), totaling 15.3% combined. The 0.9% Additional Medicare Tax applies to employee wages above $200,000 (single) or $250,000 (married filing jointly). Employers in Guam report FICA on Form 941-SS, filed quarterly with the IRS (not the Guam DRT), because FICA funds the federal Social Security and Medicare trust funds. Self-employed individuals pay the full 15.3% self-employment tax on net SE earnings above $400 via Form 1040-SS.
How do I pay my Guam income taxes?
Guam income taxes are paid to the Guam Department of Revenue and Taxation (Guam DRT). Payment methods include: (1) electronic funds transfer via the Guam DRT e-filing portal at myguamtax.com; (2) check or money order payable to 'Government of Guam' mailed to P.O. Box 2950, Hagatna, GU 96932; or (3) in-person payment at the Guam DRT office. E-filed returns typically take 4-6 weeks to process. Quarterly estimated tax payments follow the federal schedule: April 15, June 15, September 15, and January 15 of the following year. Underpayment penalties apply if you owe $1,000+ and have not paid at least 90% of current-year tax or 100% of prior-year tax (110% if AGI exceeds $150,000).

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