Federal Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)
2023 Form 5074
5074

Allocation of Individual Income Tax to Guam or the
Commonwealth of the Northern Mariana Islands (CNMI)

Department of the Treasury
Internal Revenue Service

Attach to Form 1040 or 1040-SR.
Go to www.irs.gov/Form5074 for the latest information.

Form

Your social security number

Income From Guam or the CNMI
Guam

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Wages, salaries, tips, etc. . . . . . . . . . . . . . . . .
Taxable interest . . . . . . . . . . . . . . . . . . .
Ordinary dividends . . . . . . . . . . . . . . . . . .
Taxable refunds, credits, or offsets of local Guam or CNMI income taxes
Alimony received . . . . . . . . . . . . . . . . . . .
Business income or (loss) . . . . . . . . . . . . . . . .
Capital gain or (loss) . . . . . . . . . . . . . . . . . .
Other gains or (losses) . . . . . . . . . . . . . . . . .
IRA distributions (taxable amount) . . . . . . . . . . . . .
Pensions and annuities (taxable amount) . . . . . . . . . . .
Rental real estate, royalties, partnerships, S corporations, trusts, etc. . .
Farm income or (loss) . . . . . . . . . . . . . . . . .
Unemployment compensation . . . . . . . . . . . . . .
Social security benefits (taxable amount) . . . . . . . . . . .
Other income. List type and amount
Total income. Add lines 1 through 15 . . . . . . . . . . . .

Part II

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CNMI

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Adjustments to Income From Guam or the CNMI

17 Educator expenses . . . . . . . . . . . . . . . . . . . . . .
18 Certain business expenses of reservists, performing artists, and fee-basis government
officials . . . . . . . . . . . . . . . . . . . . . . . . . .
19 Health savings account deduction . . . . . . . . . . . . . . . . .
20 Moving expenses for members of the armed forces . . . . . . . . . . .
21 Deductible part of self-employment tax
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22 Self-employed SEP, SIMPLE, and qualified plans . . . . . . . . . . . .
23 Self-employed health insurance deduction . . . . . . . . . . . . . .
24 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . .
25 IRA deduction . . . . . . . . . . . . . . . . . . . . . . . .
26 Student loan interest deduction . . . . . . . . . . . . . . . . . .
27 Reserved for future use . . . . . . . . . . . . . . . . . . . . .
28 Reserved for future use . . . . . . . . . . . . . . . . . . . . .
29 Add lines 17 through 28
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30 Adjusted gross income. Subtract line 29 from line 16 . . . . . . . . . .

Part III

2023

Attachment
Sequence No. 168

Name(s) shown on Form 1040 or 1040-SR

Part I

OMB No. 1545-0074

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Payments of Income Tax to Guam or the CNMI

31 Payments on estimated tax return filed with Guam or the CNMI
. . . . . . .
32 Income tax withheld from your wages while employed by the U.S. Government as a
civilian in Guam or the CNMI . . . . . . . . . . . . . . . . . . .
33 Income tax withheld from your wages while employed as a member of the U.S. Armed
Forces in Guam or the CNMI . . . . . . . . . . . . . . . . . . .
34 Income tax withheld from your wages earned in Guam or the CNMI other than
amounts on lines 31 through 33 . . . . . . . . . . . . . . . . . .
35 Total payments. Add lines 31 through 34 . . . . . . . . . . . . . . .
For Paperwork Reduction Act Notice, see the Instructions for Form 1040.

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Cat. No. 42243X

Form 5074 (2023)

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Form 5074 (2023)

Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments
For the latest information about developments related to Form
5074 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/Form5074.

Instructions
Purpose of form. Form 5074 provides information to the United
States so the IRS can figure the individual income tax that is
due to Guam or the CNMI.
Who must file. If you were a U.S. citizen or resident alien (other
than a bona fide resident of Guam or the CNMI), you may need
to file Form 5074. Complete this form if all of the following apply
to you (and to your spouse if filing a joint return).
• You file a U.S. income tax return.
• You report adjusted gross income (AGI) of $50,000 or more.
• At least $5,000 of the gross income on your return is from
either Guam or CNMI sources.
Joint returns. If you file jointly and only one spouse is a bona
fide resident of Guam or the CNMI for the entire tax year, the
resident status for both spouses and subsequent tax treatment
is determined by the spouse with the higher AGI (disregarding
community property laws). File Form 5074 only if the spouse
with the higher AGI is not a bona fide resident of Guam or the
CNMI for the entire tax year.
Where to file. If you are not enclosing a check or money order,
file your tax return (including Form 5074) with the Department of
the Treasury, Internal Revenue Service, Austin, TX 73301-0215
USA.
If you are including a check or money order, file your tax
return with the Internal Revenue Service, P.O. Box 1303,
Charlotte, NC 28201-1303 USA.
Amended returns. You can e-file Form 1040-X, Amended U.S.
Individual Income Tax Return, using tax filing software. Go to
www.irs.gov/Filing/Amended-Return-Frequently-AskedQuestions for more information. Or, you can send your paper
Form 1040-X to the IRS at the address in the Instructions for
Form 1040-X.
Additional information. See Pub. 570, Tax Guide for Individuals
With Income From U.S. Territories, available at www.irs.gov/
Pub570.

Part I—Income From Guam or the CNMI
Note: See Schedule 1 (Form 1040), Part I, for additional income
from Guam or the CNMI not reported on page 1 of your tax
return.
Source of income. The rules for determining the source of
income are explained in sections 861 through 865 and section
937, Regulations section 1.937-2, and chapter 2 of Pub. 570.
Some general rules are:
• The source of wages, salaries, or tips is generally where the
services are performed. If you worked both in and outside Guam
or the CNMI, include on line 1 only wages, salaries, or tips
earned while you were in Guam or the CNMI. However, certain
income earned while temporarily performing services in Guam
or the CNMI will not be considered income from Guam or the
CNMI.
De minimis exception. This is an exception to the general
rule for determining the source of income earned in Guam or the
CNMI. Generally, income from Guam or the CNMI does not
include compensation for services performed in Guam or the
CNMI if during 2023 you:

• Were a U.S. citizen or resident;
• Were not a bona fide resident of Guam or the CNMI;
• Were not employed by or under contract with an individual,
partnership, or corporation that is engaged in a trade or
business in Guam or the CNMI;
• Temporarily performed services in Guam or the CNMI for 90
days or less; and
• Earned $3,000 or less from such services.
Active duty U.S. Armed Forces. If you are a bona fide
resident of Guam or the CNMI and are stationed outside your
territory of residence, your military compensation will be
sourced in Guam or the CNMI, as applicable, under the
Servicemembers Civil Relief Act (SCRA). If you are not a bona
fide resident of one of those territories but perform services in
one of them, however, your military compensation will not be
sourced there. For further details, see Pub. 570.
Military spouses. If you are the civilian spouse of a member
of the U.S. Armed Forces, work in Guam or the CNMI, and
retain a residence or domicile in one of the 50 states or the
District of Columbia under the Military Spouses Residency Relief
Act (MSRRA), your wages, salaries, tips, and self-employment
income will not be considered income from Guam or the CNMI.
Under MSRRA, the military spouse must be in Guam or the
CNMI solely to be with their servicemember spouse who is
serving in compliance with military orders. For details on
MSRRA, see Pub. 570.
• The source of interest income is generally where the payer is
located. For example, Guam or CNMI source income includes
interest from a certificate of deposit issued by a bank or branch
of a U.S. bank in Guam or the CNMI.
• Generally, dividends are sourced where the paying
corporation is created or organized.
• Taxable refunds, credits, or offsets of local Guam or CNMI
income taxes only include nonmirror code income taxes.
• Alimony received from a person who is a bona fide resident of
Guam or the CNMI is sourced in that specific territory.
• Except as provided in regulations, income that is from sources
within the United States or effectively connected with the
conduct of a trade or business in the United States is not
income from Guam or the CNMI.
• The source of gains, profits, or income from the sale or
disposition of real property (and any interest in real property) is
generally where the real property is located.
Personal property. The source of income from the sale of
nondepreciable personal property is generally the seller’s
residence. For example, if you are a U.S. citizen or resident alien
and not a bona fide resident of Guam or the CNMI, gain from
the sale or disposition of personal property is generally treated
as U.S. source. Income from the sale of inventory is generally
sourced where the title to the property passes. However, in
some cases, such as when the taxpayer produces or purchases
the inventory within a U.S. territory, and then sells the inventory
within the United States, source is based on allocation. See
section 865 for details.
Special rules may apply to bona fide residents of U.S.
territories who have gain from dispositions of certain
investment property within the 10-year period
CAUTION
beginning when they became a bona fide resident.
For details, see Special Rules for Gains From Dispositions of
Certain Property, in chapter 2 of Pub. 570, Regulations section
1.937-2(f)(1), and Examples 1 and 2 of section 1.937-2(k).

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Form 5074 (2023)

Part II—Adjustments to Income From Guam or the
CNMI
Note: See Schedule 1 (Form 1040), Part II, for adjustments to
income from Guam or the CNMI.
Line 20. For tax years beginning after December 31, 2017, and
before January 1, 2026, a moving expense deduction is only
allowed for a member of the U.S. Armed Forces who moves
pursuant to a military order and incident to a permanent change
of station.
Lines 21 through 23. If you had Guam or CNMI source selfemployment income, figure the amount to enter on each line by
(1) dividing your Guam or CNMI source self-employment income
by your total (worldwide) self-employment income, and (2)
multiplying the total amount of each deduction that applies to
you by the result in (1).
Line 24. Enter the amount of penalty on early withdrawals from
savings accounts in banks or branches of U.S. banks located in
Guam or the CNMI. The Form 1099-INT or Form 1099-OID you
received will show the amount of any penalty you were charged.
Line 25. Enter the total of your and your spouse’s IRA
deductions attributable to Guam or CNMI compensation or
earned income. Figure the amount to report on line 25 by (1)
dividing your Guam or CNMI compensation or earned income
by your total (worldwide) compensation or earned income, and
(2) multiplying the amount of your IRA deduction by the result in
(1). Figure the amount of your spouse’s IRA deduction the same
way.

Line 29. Include in the total on line 29 the amount of any other
deductions included on the Archer MSA deduction line and the
Total other adjustments line of Schedule 1 (Form 1040) that are
attributable to your Guam or CNMI income. On the dotted line
next to line 29, enter the name and amount of each deduction
attributable to your Guam or CNMI income. On line 29, enter the
total amount of deductions attributable to your Guam or CNMI
income. If you or your spouse had an Archer MSA deduction on
Schedule 1 (Form 1040), figure the amount to report on line 29
in the same way as you would an IRA deduction (see Line 25,
earlier).
Line 30. This amount is your adjusted gross income.

Penalty for Failure To Furnish Information
If you became or ceased to be a bona fide resident of a U.S.
territory, you may be required to file Form 8898, Statement for
Individuals Who Begin or End Bona Fide Residence in a U.S.
Possession. If you fail to provide the required information, you
may have to pay a $1,000 penalty for each failure unless you
can show the failure was due to reasonable cause and not willful
neglect. This penalty is in addition to any criminal penalty
provided by law. For details, see the Instructions for Form 8898.