# Taxation of Bona Fide Residents in CNMI / Saipan



## gerryborn (Feb 16, 2021)

Greetings,
I'm trying to understand how a U.S. citizen would be taxed if he became a bona fide resident of Saipan. I found this:

If Taxpayer Has Both Territory- and Non-Territory-Source Income...

No U.S. or CNMI income tax return must be filed with the IRS.
File a CNMI income tax return and report worldwide income.
Taxpayer can generally claim a credit against CNMI income tax liability for income taxes paid to the IRS, a foreign country, or the CNMI.
Pay any income tax due to the CNMI. 

This seems to suggest that a U.S. citizen would be subject to the CNMI's tax system and could benefit from their tax rebate program. What would stop someone from moving to Saipan, becoming a bona fide resident (183 days), and then taking substantial IRA distributions at a reduced tax rate? Thanks for any insights you have on this perplexing subject.
G


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## 255 (Sep 8, 2018)

@gerryborn -- If you move to the Northern Mariana Islands and become a bona fide resident, you'd be subject to the CNMI tax régime and would no longer have a U.S. IRS filing requirement. People have done this for years with both the USVI & Puerto Rico to take advantage of favorable tax treatments! The CNMI tax system is similar to the U.S., even with form numbers: https://www.finance.gov.mp/division-forms/revenue-taxation/2020/2020-1040-cm.pdf Enjoy your residence in this beautiful archipelago, which along with Guam are touted as being like Hawaii 50 years ago!


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