Guam Taxes: Residency, Filing and Federal Obligations

Guam is a US territory with a separately administered income-tax system. Living there does not by itself settle which return you must file.

The Guam Territorial income tax is established under 48 USC § 1421i. It applies federal income-tax law with territorial substitutions and exceptions; it is not a promise that every federal provision applies identically.

Start with residence and income source, then check the filing rules in IRS Publication 570. The income-tax return, Form 5074 allocation information and Form 8898 residence-change notice serve different purposes; a requirement for one does not automatically create a requirement for the others.

The Three-Part Bona Fide Residency Test

Bona fide residence depends on presence, tax home and closer connection. Special rules can apply in the year of a move and for military service.

(a) The Presence Test. For US citizens and resident aliens, qualifying alternatives include 183 days in Guam in the tax year or 549 days across that year and the two preceding years, with at least 60 days in each. The 90-day US limit is a separate alternative, not an additional requirement for those routes. Other alternatives and special day-count rules appear in IRS Publication 570.

(b) The Tax Home Test. Generally, you cannot have a tax home outside Guam during the tax year. This usually means your main business or employment location; if you have none, your regular home may determine it. Review the specific year-of-move and other exceptions before applying this test.

(c) The Closer Connection Test. Compare your connections with Guam, the United States and foreign countries, including your home, family, affiliations, banking and residence shown on documents. You must not have a closer connection to the United States or a foreign country than to Guam, subject to applicable exceptions.

A US citizen or resident alien who is not a bona fide Guam resident generally reports worldwide income to the IRS. Nonresident aliens have different filing rules. Failing Guam residency does not automatically require two income-tax returns.

The $3,000 / 90-Day De Minimis Exception

The $3,000/90-day rule concerns income sourcing, not a blanket filing exemption. It generally requires US citizenship or residence, no bona fide Guam residence, temporary services in Guam for no more than 90 days, compensation no greater than $3,000, and no employment or contract with a person or entity conducting business in Guam. Exceeding a threshold does not by itself establish the filing destination.

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 or the CNMI. The instructions cover US citizens or resident aliens filing a US return, other than bona fide residents of Guam or the CNMI, with AGI of at least $50,000 and at least $5,000 of gross income from either territory. Joint-return residency follows the higher-AGI spouse, disregarding community-property rules.

Form 8898 — Reporting a Change in Bona Fide Residence. Review this form when taking a qualifying tax position that Guam bona fide residence began or ended. The income threshold is more than $75,000 of individual worldwide gross income, excluding the spouse’s income. File separately from the income-tax return by the Form 1040 deadline, including extensions.

Form 1040-SS — Self-Employment Tax Return. A bona fide Guam resident without a US Form 1040 filing requirement generally uses Form 1040-SS when net self-employment earnings are $400 or more. Church-employee income and other special filing situations have separate rules; consult the form instructions.

Form 941 — Employer’s Quarterly Federal Tax Return. Employers in Guam that formerly used Form 941-SS now use Form 941; Form 941-SS was discontinued after 2023. Check the instructions for exceptions to quarterly filing.

Guam-Source Income Defined

Guam-source income: services are generally sourced where performed, interest by the payer’s location, dividends by where the corporation is created or organized, and rents or gains from real property by the property’s location. Exceptions and special rules apply; Form 5074’s instructions explain why simply receiving money while in Guam does not settle its source.

FICA, Self-Employment Tax, and Payroll

For 2026, Social Security tax is 6.2% each for employee and employer on covered wages up to $184,500; Medicare is 1.45% each without a wage cap. Employers withhold an additional 0.9% Medicare tax once an employee’s annual wages exceed $200,000, regardless of filing status, with no employer match. The individual’s final Additional Medicare Tax depends on filing status.

Tax Credits on the Guam Return

The 2025 Guam Form 1040 includes lines for earned income credit, child tax credit or credit for other dependents, additional child tax credit and American opportunity credit. A listed credit does not establish your eligibility: check the conditions and schedules for the tax year being filed. Do not assume Guam residence automatically eliminates these credits.

Estate and Gift Tax

Estate and gift tax status requires a separate analysis from income-tax residence. IRS instructions identify special treatment for citizenship acquired solely through birth, residence or citizenship in a US territory. Do not assume every Guam resident receives the same estate-tax exclusion or files the same gift-tax form. For gifts, exclusions, the type of interest transferred and gift-splitting rules can affect reporting; a dollar threshold alone is not a complete filing test.

Military Households

A Guam assignment alone does not establish Guam bona fide residence. IRS guidance preserves an existing qualifying Guam resident’s status during an absence solely under military orders, while presence solely under orders does not create that status.

For a married service member and spouse, 50 USC 4001(a)(3) lists tax-residency election options: the member’s residence or domicile, the spouse’s residence or domicile, or the member’s permanent duty station. Before filing, confirm how the chosen position applies to Guam, federal and relevant state returns; the election is not a blanket exemption for all income.

To discuss your residence history, income sources and filing questions, book an introductory tax consultation and confirm which returns, fees and responsibilities an engagement would cover.

Guam Territorial Tax Coordination

FBAR & FATCA Requirements

FBAR and Form 8938 have different rules. An account maintained at a financial institution physically located in Guam is not foreign for FBAR purposes. A US person with a financial interest in or signature authority over foreign accounts generally must file FBAR when their combined value exceeds $10,000 at any time during the calendar year, subject to exceptions. Form 8938 does not provide a blanket exemption for Guam accounts: an account at a Guam-organized financial institution can be a specified foreign financial asset. Its instructions provide exceptions for qualifying assets of bona fide residents of that territory. Bona fide Guam residents generally have no IRS Form 8938 filing obligation when they have no US federal income-tax return obligation; ask Guam DRT about any mirrored territorial reporting requirement.

Foreign Earned Income Exclusion (FEIE)

Income from services performed in Guam is not foreign earned income for the federal foreign earned income exclusion: US territories are not foreign countries for this purpose. Guam’s income-tax filing coordination is a separate system, not an FEIE election or a promise of tax-free income.

Common Tax Issues in Guam

• 1Bona fide residence: evaluate presence, tax home and closer connection together. A day count alone does not establish status; year-of-move and military exceptions may matter.
• 2Filing forms: distinguish the income-tax return from Form 5074 allocation information and the separate Form 8898 residence-change notice. Each has its own eligibility conditions.
• 3Military households: distinguish duty location, tax residence and any valid election. Check each spouse’s income sources and withholding before deciding which jurisdiction receives the return.
• 4Moving during the year: review the year-of-move residency exceptions before choosing a filing destination. A part-year stay does not automatically require two income-tax returns.
• 5Federal employees: do not choose a filing jurisdiction solely from the identity of your employer. Review bona fide residence, income source and the applicable Guam filing rules in IRS Publication 570; military households also have special rules.
• 6Business Privilege Tax: Guam’s published Business Privilege Tax law sets a 4.5% rate from October 1, 2025, reducing to 4% on October 1, 2026, for listed categories including ordinary service businesses and professions. Tax bases, exemptions and special rates depend on the activity; check the category and reporting period under 11 GCA § 26202. This is a separate business tax; do not substitute it for an income-tax calculation.
• 7Tax credits: the 2025 Guam return includes family, earned-income and education credit lines. Confirm eligibility under the relevant tax-year instructions rather than assuming all credits are unavailable.
• 8Payroll: use the correct tax year’s Social Security wage cap and current Form 941 instructions. Separate regular Social Security/Medicare contributions from Additional Medicare withholding and the employee’s final liability.
• 9Self-employment: review Form 1040-SS if you are a bona fide Guam resident without a US Form 1040 requirement and have net self-employment earnings of at least $400. Other filing triggers and exceptions are described in the instructions.
• 10Guam-source income: services are generally sourced where performed, interest by the payer’s location, dividends by where the corporation is created or organized, and rents or gains from real property by the property’s location. Exceptions and special rules apply; Form 5074’s instructions explain why simply receiving money while in Guam does not settle its source.
• 11Estimated payments: income without withholding can create an estimated-tax obligation, but does not automatically do so. Check the applicable tax-year calculation and exceptions. IRS Publication 570 generally directs required income-tax estimates to the jurisdiction where you would file if the year ended on the first payment’s due date, with a higher-estimated-AGI spouse rule for joint payments. Confirm Guam payment dates with DRT; its general calendar differs from the federal schedule. Separate federal self-employment or Additional Medicare obligations may remain.

Local Resources

Frequently Asked Questions: US Taxes in Guam

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