Understanding the Act 60 Annual Donation and Compliance Requirements

Imagine opening the DDEC Incentives Portal and finding a red banner saying your Act 60 annual report is overdue. You were sure your accountant handled the donation receipts. You thought the deadline was months away. This guide covers the Act 60 annual donation and the other compliance requirements, which deadlines apply to which decree, and how to build a system that keeps your tax decree safe.

What Act 60 Compliance Actually Means Once the Decree Is Signed

When my decree finally came through, I printed it, framed the first page in my head, and thought the hard part was over. It took me a full tax season to understand that the approval was the easy part. The decree opens an ongoing relationship with the Puerto Rico government, and that relationship comes with paperwork, deadlines and proof that you are still doing what you promised to do.

If you are still getting a feel for the overall incentive framework, see Understanding Act 60 Tax Incentives in Puerto Rico: The Full Guide (2026) before going further. The rest of this article assumes you already have a decree, or are close to getting one, and want to keep it in good standing.

The Decree Is a Contract, Not a Certificate

The most useful mindset shift I ever made was to stop thinking of my decree as a certificate and start thinking of it as a contract. Legally, an Act 60 decree is a binding agreement between you and the Government of Puerto Rico, administered by the Department of Economic Development and Commerce, known locally as DDEC. Puerto Rico grants you specific tax treatment. In return, you commit to specific behavior: living here as a bona fide resident, buying residential property within the time the law allows, making an annual donation, filing an annual report, and paying the associated filing fee.

A contract has terms, and the terms are written in your decree. This matters because decrees are not identical. Someone who received a decree under the old Act 22-2012 has a different set of obligations from someone whose decree was issued under the Act 60-2019 Incentives Code. Even two decrees issued under Act 60 can contain slightly different language depending on when they were granted and what kind of activity they cover. Your decree, not a summary on a website, is the document that governs you.

Here is a scenario that often plays out. Marcus moves from Austin to Dorado, gets his individual resident investor decree, and copies his compliance checklist from a friend in Rincón. The friend has an older Act 22 decree. Marcus follows the friend’s dates and donation rules for two years before his CPA notices that his own decree has different terms. Nothing catastrophic happened, but he spent an anxious month confirming that his filings were acceptable. Read your own decree, highlight every obligation, and keep that highlighted copy where you can find it.

Who Is Watching: DDEC, Hacienda and the IRS

Three different agencies care about your Act 60 life, and each one looks at a different piece of it. Mixing them up is one of the fastest ways to miss something.

DDEC grants and supervises the decree itself. It receives your annual report, checks that you made the donation, collects the annual report fee, and can investigate or revoke a decree if you fail to comply. Its Office of Incentives for Businesses in Puerto Rico publishes informational bulletins that clarify deadlines and procedures, and those bulletins are worth reading whenever one comes out.

The Departamento de Hacienda is Puerto Rico’s tax authority. It receives your Puerto Rico income tax return, the planilla, through the SURI portal. Your decree changes how certain income is taxed, but it does not excuse you from filing. If SURI still feels like a maze, see Understanding SURI (Hacienda’s Online Tax Portal) in Puerto Rico for a walkthrough.

The IRS is the third party, and the one many decree holders think about least until a letter arrives. Your federal benefit depends on being a bona fide resident of Puerto Rico, because that status lets you exclude Puerto Rico-source income from federal tax. The IRS has publicly made Puerto Rico incentive holders a focus of compliance attention, so your federal residency position needs to hold up just as well as your local paperwork does.

Older Act 20 and Act 22 Decrees Versus Newer Act 60 Decrees

Act 60-2019 consolidated many earlier incentive laws into a single Incentives Code. People who received decrees under Act 20-2012, which covered export services, or Act 22-2012, which covered individual resident investors, generally kept those decrees. They were not automatically rewritten. In practice, Puerto Rico has two generations of decree holders living side by side, often in the same condo buildings in Condado and Palmas del Mar, with different obligations.

The differences that matter most in day-to-day compliance are the annual report deadline, the donation requirement, and in some cases the property purchase rules. Older decrees tend to tie the annual report to the income tax return. Newer decrees issued under Act 60 itself generally use a fixed annual date. Donation rules have also been tightened and restructured by amendments over the years. As a result, the donation that satisfies an older decree may not satisfy a newer one.

If you are not sure which law your decree was issued under, look at the first page and the recitals. The decree will name the statute. That single detail determines a large share of your compliance calendar, and the deadline section below depends on it.

The Annual Donation Requirement Explained

The annual donation is the requirement that surprises people most, partly because it feels unusual to be legally required to give to charity, and partly because the rules have shifted over time. Let’s slow down and go through it carefully.

What the Donation Is and Why It Exists

Individual resident investors with a decree must make a yearly donation to nonprofit entities that operate in Puerto Rico. The idea behind it is simple. The incentive program brings people who benefit significantly from local tax treatment, and the donation channels part of that benefit directly into local communities, often to organizations working on issues such as child poverty, education and health.

The amount is fixed by law and by the terms of your decree rather than calculated from your income. The law also controls where the money can go. Amendments over the years have required that part of the donation go to nonprofits on an approved list maintained for this purpose, and that the donation go to entities that are not controlled by you or your family. The exact amount, the split between categories, and the qualifying lists have changed through legislation. Confirm the current requirement for your decree type directly with DDEC or your advisor before you write the check each year.

I treat the donation as a fixed annual cost of holding the decree, in the same category as the annual report fee. Planning it that way removes the temptation to leave it to the last minute. A rushed donation in the final week before a deadline is exactly when people send money to an organization that turns out not to qualify.

Choosing Eligible Nonprofits Without Getting Burned

Choosing a recipient sounds easy until you try to do it properly. A nonprofit can be a wonderful organization doing great work and still not count toward your requirement. To count, it has to meet the conditions in the law and, where applicable, appear on the approved list.

My process looks like this:

1. Pull up the current list of eligible entities published for Act 60 donation purposes and confirm that the list applies to your decree type.
2. Shortlist two or three organizations whose missions you care about, so you are not choosing purely on paperwork.
3. Confirm with each organization that it is still in good standing and still on the list for the year you are donating.
4. Ask the organization in advance what kind of receipt or certification it issues for Act 60 donors, since many of them handle these requests every year.
5. Make the donation from an account in your own name, using a traceable method such as a check or bank transfer, never cash.
6. Request the formal receipt immediately and file it in your compliance folder the same day.

A friend of mine in Guaynabo once donated to a youth sports program run by a neighbor’s family foundation. It was a lovely gesture, but the organization was not on the eligible list, and he had to make a second, qualifying donation to stay compliant. Give to the neighborhood program out of goodwill if you like, but satisfy your decree with an organization you have verified.

If your savings sit in another currency, for example because you are a Canadian, British or European citizen with a US tax connection, you will want those funds in a Puerto Rico dollar account well before donation season. Wise is one practical way to move euros, pounds or other currencies into a dollar account with a clear record of the conversion. Check their page for current fees and limits.

Documenting the Donation So It Survives Review

The donation only counts if you can prove it. Your annual report requires evidence, and if DDEC or Hacienda ever asks questions, the burden is on you to show that the donation was made, in the right amount, to the right type of entity, within the right period.

Good documentation usually includes the official receipt or certification from the nonprofit, showing its legal name, your name, the date and the amount. It also includes the bank record showing the funds leaving your account and the nonprofit’s evidence of eligibility for the relevant year. I save all three as PDFs with a consistent file name, such as the year, the word donation and the organization’s short name, in a folder for that tax year.

Think about timing as well. The donation has to fall within the period your decree and the law specify, typically tied to the tax year the annual report covers. A donation made in January might count toward the report you are preparing, or toward the following year’s report, depending on the rules that apply to you. Confirm which year a donation counts toward before you make it, and write that tax year on the receipt file name so future you does not have to guess.

The Annual Report and the Deadlines That Govern It

This is the section that matters most if you only read one, because the deadlines are where most of the stress comes from. There are two separate filings with two separate agencies. They are related, but they are not the same thing, and they do not share a due date.

The Planilla Deadline Comes First

Your Puerto Rico individual income tax return, the planilla, goes to Hacienda through SURI. As of October 2026, according to Hacienda’s instructions for the 2025 Individual Income Tax Return, the rule for calendar-year filers is that the return is due on 15 April after the close of the tax year. The 2025 return was due on Wednesday, 15 April 2026.

You can get an automatic extension to 15 October by requesting it on Form SC 2644 through SURI on or before the original due date. Two details here catch people. First, you have to request the extension by 15 April, not after. Second, the extension gives you more time to file, but it does not give you more time to pay. Any tax you owe is still due by the original deadline, and late payment can bring interest and surcharges. For what happens if you miss the date entirely, see What Is the Penalty for Filing the Planilla Late in Puerto Rico?

The Hacienda instructions do not set a separate planilla date for Act 60 decree holders. If you hold a decree, your planilla follows the same 15 April rule as everyone else, with the same 15 October extension option. For the mechanics of preparing the return itself, see How to File Your Annual Income Tax Return (Planilla) in Puerto Rico.

When the DDEC Annual Report Is Due

The DDEC annual report is a separate filing, made through the DDEC Incentives Portal, and its due date depends on your decree. DDEC’s Office of Incentives for Businesses in Puerto Rico addressed this in Boletín Informativo DDEC 2026-005, issued on 14 May 2026. As of October 2026, the governing principle is simple: the due date is whatever your decree says.

Within that principle, DDEC described two general patterns. Decrees issued under earlier incentive laws, including Act 20-2012 and Act 22-2012, generally file the annual report 30 days after filing the income tax return, taking extensions into account. For tax year 2025, that meant 15 May 2026 for holders who did not take a Hacienda extension. If you did take the extension, your report date moves with your return, so work it out from your actual filing timeline and confirm it against your decree.

Decrees issued under the Act 60-2019 Incentives Code generally file by 15 November of the year following the tax year, unless the decree sets a different date. For tax year 2025, that meant 16 November 2026, because 15 November falls on a Sunday.

Here is how the dates line up for tax year 2025:

Filing	Agency and channel	Applies to	General rule	Date for tax year 2025
Individual income tax return	Hacienda, through SURI	All calendar-year individual filers, including decree holders	15 April after the close of the tax year	Wednesday, 15 April 2026
Planilla with automatic extension	Hacienda, Form SC 2644 through SURI, requested by the due date	Filers who request the extension in time	15 October; time to pay is not extended	15 October 2026
DDEC annual report	DDEC Incentives Portal	Decrees under earlier laws, including Act 20-2012 and Act 22-2012	30 days after filing the income tax return, including extensions, unless the decree says otherwise	15 May 2026 for holders who took no Hacienda extension
DDEC annual report	DDEC Incentives Portal	Decrees issued under the Act 60-2019 Incentives Code	15 November of the following year, unless the decree sets another date	Monday, 16 November 2026

Whatever the table says, the date written in your own decree controls. If your decree names a date, that date wins.

Filing Through the DDEC Incentives Portal Step by Step

The portal is not difficult once you have done it once, but the first time can feel overwhelming, especially if Spanish is not your first language. Some screens and guidance documents may appear only in Spanish, so give yourself extra time and a translation tool. This is the sequence I follow each year:

1. Confirm your decree number, the statute it was issued under, and the exact annual report date written in the decree.
2. Make sure your planilla is filed, because the annual report generally relies on information from the return and older decrees are timed from it.
3. Gather your donation receipts, bank records and proof of the nonprofit’s eligibility.
4. Gather evidence for your residential property requirement, such as the recorded deed, if it applies to your decree.
5. Collect residency evidence for the year, including your day-tracking log and travel records.
6. Log in to the DDEC Incentives Portal with the credentials tied to your decree and select the correct reporting year.
7. Complete each section of the report form, uploading documents in the formats the portal accepts.
8. Pay the annual report filing fee through the portal. Check DDEC’s current guidance for the amount that applies to your decree.
9. Download or screenshot the submission confirmation and payment receipt, and save them with your donation and property documents.
10. Set a reminder a few weeks later to log back in and check for any requests for additional information.

That last step saved me once. DDEC had flagged a missing page in my property documentation. Because I checked, I fixed it within days instead of discovering it months later.

The Other Recurring Obligations Behind Your Decree

The donation and the annual report get most of the attention, but they rest on a foundation of other commitments. If that foundation cracks, a perfectly filed report will not protect you.

Bona Fide Residency Year After Year

Your individual decree exists because you are a resident of Puerto Rico. For federal purposes, that means meeting the bona fide residency rules: the presence test, the tax home test and the closer connection test, all in the same year. For a clear breakdown of each test, see Understanding the Three Residency Tests (Presence, Tax Home, Closer Connection).

Residency is not something you establish once and then forget. It is tested every year, and it is the area where lifestyle quietly erodes compliance. People who move here often still have aging parents in New Jersey, a boat in Florida or a summer routine in Colorado. None of that disqualifies you automatically, but each trip off-island counts against the presence test, and each strong tie elsewhere can weaken your closer connection position.

Day counting is where I recommend being almost obsessive. Keep a simple log of every day on and off the island, back it up with boarding passes and credit card statements, and reconcile it quarterly. See How to Document Your Days in Puerto Rico for the Presence Test for a practical method. For the year you move, the IRS generally expects Form 8898 from certain people who begin or end bona fide residence in a US territory. A firm that specializes in cross-border returns, such as Taxes for Expats, can prepare that form alongside your federal return. Check their site for current service details and pricing.

The Residential Property Requirement

Individual resident investors under Act 60 must buy residential property in Puerto Rico to use as their principal residence, within the time the law and their decree allow. Older Act 22 decrees had their own version of this rule, and the details differ between decree generations, so once again your decree is the reference.

The practical point is that the purchase has to be documented with proof that survives review, which in Puerto Rico means a deed executed before a notary and presented to the Property Registry. Closings here move at their own pace. Notaries, title studies and registry presentation all take time, so do not leave this until the end of your allowed window. For an overview of how purchases work on the island, see How to Buy Property in Puerto Rico: The Full Guide (2027).

A common real-life complication is buying through an entity or with a partner. If you buy through an LLC, or jointly with someone who is not on your decree, ask your attorney whether the purchase satisfies your specific requirement before you sign. I know a couple in Isabela who bought a beautiful house through a family trust on mainland advice. They then spent months restructuring ownership after a Puerto Rico attorney pointed out the problem.

Business Decree Obligations for Export Services Holders

If you also hold a business decree for export services, a whole second set of obligations applies on top of your individual decree. Business decrees usually carry their own annual report, their own filing fee, and conditions related to the business itself, such as maintaining operations in Puerto Rico and, depending on the size of the business and the decree terms, employment requirements.

The business is a separate taxpayer with its own Hacienda filings, municipal obligations and records. Many decree holders run both an individual decree and a business decree, and the cleanest approach is to treat them as two compliance files that share a calendar. For a closer look at the business side, see Understanding Act 60 (Export Services) Benefits for Businesses in Puerto Rico.

One trap here: the line between the two decrees can blur when you are a solo consultant. Your personal living expenses, your company’s operating expenses and your donation should all run through clearly separated accounts. That separation makes your annual reports easier to prepare. It also makes your position much stronger if anyone ever asks how the business actually operates on the island.

Building a Compliance Calendar and Record System

After a few years here, I have come to believe that Act 60 compliance is mostly a filing system problem. The rules are knowable. What breaks people is scattered receipts, forgotten passwords and deadlines that live only in someone’s memory.

A Month-by-Month Rhythm That Works

You do not need complicated software. You need a repeating rhythm that puts each task in a predictable season. Here is the structure I use for a calendar-year individual decree. Adjust the report date to whatever your decree actually says.

Period	Main task	Agency	Notes
January to February	Gather year-end bank statements, withholding statements and investment reports	Hacienda and IRS	Start the planilla early so the DDEC report is not delayed
By 15 April	File the planilla through SURI, or request the automatic extension on Form SC 2644	Hacienda	Any tax owed is still due on 15 April, even with an extension
By 15 October	File the planilla if you took the extension	Hacienda	Older decrees time the annual report from the filing date
30 days after filing the return	DDEC annual report for decrees under earlier laws, including Act 20-2012 and Act 22-2012, unless the decree says otherwise	DDEC Incentives Portal	For tax year 2025 without an extension, this meant 15 May 2026
By 15 November of the following year	DDEC annual report for decrees issued under Act 60-2019, unless the decree sets another date	DDEC Incentives Portal	For tax year 2025 this meant 16 November 2026
Quarterly	Reconcile your day-tracking log with travel and payment records	IRS residency tests	Catch presence problems while you can still change plans
Early in the donation period	Verify recipient eligibility and make the annual donation	DDEC	Save the receipt and bank proof immediately

I put every one of these into a shared digital calendar with two reminders: one a month ahead and one a week ahead. My accountant has access to the same calendar, so neither of us can claim we were not warned.

What to Keep and Where to Keep It

Your records need to answer three questions at any moment: did you live here, did you do what the decree requires, and did you report it correctly? I keep one folder per tax year with subfolders for residency, donation, property, Hacienda filings, DDEC filings and federal filings. Everything goes in as PDF, named consistently, with a backup in a separate cloud account.

Residency records include the day log, travel confirmations, your Puerto Rico driver’s license, voter registration, utility bills, lease or deed, and evidence of community ties such as club memberships or a local doctor. Donation records include receipts, bank proof and eligibility evidence. Property records include the deed and registry documentation. Filing records include the planilla, extension confirmations, the DDEC report submission and payment receipts. For a deeper look at retention, see What Tax Records Do I Need to Keep as a Resident of Puerto Rico?

Keep these records longer than feels necessary. Decree compliance can be reviewed years after the fact, and a decree runs for a long time. The person who can produce a clean folder in an afternoon is in a very different position from the person digging through old email inboxes.

Coordinating Your Advisors and Money Flows

Most decree holders end up with at least two professionals: a Puerto Rico CPA or attorney who handles Hacienda and DDEC, and someone who handles the federal side. Problems tend to appear in the gap between them. The local advisor assumes the federal advisor is tracking residency days, the federal advisor assumes the local one confirmed the donation, and nobody owns the full picture.

Fix this by assigning ownership explicitly. I send a short email each January listing every obligation for the year and who is responsible for each one, and I ask both advisors to reply confirming. If your federal return is handled by a specialist firm like Taxes for Expats, share the same residency log and decree copy with them that your local CPA uses, so both returns tell the same story.

Money flows matter too. Pay the donation, the report fee and your Puerto Rico taxes from a local account in your own name. This keeps the paper trail clean and supports your residency position. If income or savings arrive in foreign currencies, convert them through a traceable channel. Wise is one option for moving funds into your Puerto Rico dollar account with a clear statement of each conversion. Then make the actual payments from your local bank.

What Happens When Something Goes Wrong

Even careful people miss things. A hurricane knocks out power the week of a deadline, a parent gets sick and you spend two months off-island, or a nonprofit loses its eligibility after you have already donated. What matters is how quickly and honestly you respond.

Late or Missing Reports

If you miss a DDEC annual report deadline, the decree is not cancelled automatically the next morning, but you are now out of compliance with your contract. The law gives DDEC tools to address that, including fines and, in serious or repeated cases, revocation of the decree. Revocation can be extremely expensive, because it can strip away the tax treatment you have been relying on.

The best response to a missed date is to file as soon as possible, pay whatever fee or penalty applies, and keep a written record of why the filing was late. Contact DDEC or have your advisor contact them if anything is unclear. Waiting and hoping nobody notices is the worst strategy, because the portal records the date of every submission.

The same goes for Hacienda. A late planilla or late payment brings its own consequences under Puerto Rico tax law, separate from anything DDEC does. Since older decrees time the annual report from the return, a late planilla can push your DDEC filing late as well.

Life Changes That Affect Your Decree

Some of the most serious compliance risks come from life events. Marriage, divorce, a child moving in or out, a long medical stay on the mainland, selling your home, or moving your business can all affect how you meet your decree’s conditions.

Selling your principal residence is a good example. If your decree requires you to own residential property as your principal residence, selling without buying a replacement could put you out of compliance. A long medical stay off-island could threaten your presence test, although the federal rules contain some relief for specific circumstances that your advisor can evaluate. Before any major change, read your decree and talk to your advisor, ideally before the change happens rather than after.

If you are building toward a long-term life here, see What Are the Annual Requirements to Keep Act 60 Status in Puerto Rico? for a year-by-year view. To understand how the decree itself is structured, see Understanding the Tax Closing Agreement (Decree) Process in Puerto Rico.

Pros and Cons of DIY Versus Professional Compliance Help

Some decree holders handle the annual report themselves and use professionals only for the tax returns. Others hand everything to a firm. Both approaches work, and the right choice depends on how complex your situation is and how comfortable you are with Spanish-language government portals.

Approach	Advantages	Disadvantages	Best suited to
Doing the DDEC report yourself	Full visibility into your own file, lower professional fees, faster personal awareness of problems	Learning curve on the portal, Spanish-language guidance, risk of misreading decree terms	Single individual decree, simple finances, strong organizational habits
Local CPA or attorney handles everything	Familiarity with DDEC practice, Spanish fluency, accountability for deadlines	Higher cost, risk of becoming disconnected from your own compliance	Holders with both individual and business decrees
Hybrid with a local advisor and a federal specialist	Each side handled by someone focused on it, stronger residency documentation	Requires active coordination to avoid gaps	Holders with mainland income, investments or frequent travel

I use the hybrid approach. I prepare and organize every document myself, my Puerto Rico CPA reviews and submits the DDEC report, and a federal specialist handles the IRS side. It costs more than doing everything myself, but my compliance folder is clean, and I know exactly where my decree stands every year.

Whatever path you choose, the core habits stay the same. Read your decree, verify each donation recipient, file the planilla on time, file the annual report by the date your decree sets, and keep records that tell a consistent story. Do that every year and Act 60 compliance becomes a routine part of island life rather than a recurring source of panic.

Disclaimer

This article is for general informational purposes only and does not constitute professional advice. Laws, prices and regulations vary by location and change over time. Consult a qualified professional for guidance on your specific situation.