Form 4563 Definition

What Is Form 4563: Exclusion of Income for Bona Fide Residents of American Samoa?

Form 4563: Exclusion of Income for Bona Fide Residents of American Samoa is a tax form created and distributed by the Internal Revenue Service (IRS). Form 4563 determines the amount of income earned in American Samoa that can be excluded from a taxpayer's gross income. 

American Samoa is an unincorporated territory of the United States located in the South Pacific Ocean, southeast of the Independent State of Samoa. The IRS focuses on the source of the income when determining what income can be excluded from taxpayers' claims. If a taxpayer earns income from outside and inside American Samoa, all wages, salaries, or tips from outside are not included in Form 4563. Any income earned from interest has to be from a bank located in American Samoa in order to qualify for Form 4563. Dividend income may qualify for the exclusion if it is from a company created or organized in American Samoa.

Who Can File Form 4563: Exclusion of Income for Bona Fide Residents of American Samoa?

In order to qualify for this exemption, the taxpayer must be either a resident of American Samoa or conduct business there.

“Bona Fide Residents of American Samoa” are the only individuals who need to fill out form 4563 and qualify for the income exclusion, but what makes a resident bona fide? Many people consider the 183-day rule a standard. The 183-day rule is part of the United States Internal Revenue Code and establishes whether an individual can be considered a bona fide resident of the United States for tax purposes. The 183-day rule means an individual must be in the United States for a minimum of 183 days within a three-year consecutive period. In applying the rule, the IRS includes exemptions for active-duty military personnel.

In Internal Revenue Code 937, the IRS has also laid out five rules for the physical-presence test to determine who qualifies as a resident of a U.S. territory for tax purposes. To be considered a resident of American Samoa under these rules, the individual must live in American Samoa for a minimum of 183 days during the taxable year. The individual also must have spent a minimum of 549 days during the last three years in American Samoa, as well as the last 60 days of each of those three years. Additionally, the person must not have been present in the United States for more than 90 days during the taxable year.

How to File Form 4563: Exclusion of Income for Bona Fide Residents of American Samoa

If you qualify for an exclusion of any of your income, you should complete Form 4563 and attach it to your Form 1040 when you file your income tax return. Note that you cannot file Form 4563 by itself.

Form 4563 is available on the IRS website.