File CNMI Taxes: The Commonwealth of Northern Mariana Islands

Residents of United States territories, such as the Commonwealth of the Northern Mariana Islands, can be subject to tax laws that differ somewhat from the U.S. For the purpose of tax filling, there are three categories of residents in the Mariana Islands:

  • Bona fide residents of the CNMI, whether or not they are U.S. citizens
  • Transplanted U.S. citizens, resident aliens and nonresident aliens from the mainland who are not bona fide residents of the CNMI
  • Citizens of the CNMI who are not citizens of the U.S.

Each of these groups is subject to separate provisions in both the tax law of the CNMI and the United States. For example, whereas all self-employed residents must pay applicable U.S. self-employment taxes, bona fide residents who are not self-employed, regardless of citizenship, pay only CNMI taxes and do not have to file with the IRS. Transplanted U.S. citizens and any aliens generally file their returns with the IRS. Neither such citizens or aliens must file a return with or pay taxes to the CNMI.

CNMI Tax Exceptions for Military Personnel and Others

Even with these relatively simple, straightforward rules, there are exceptions. Chief among these regards United States military personnel living in the CNMI and their families. For example, bona fide residents who are also military personnel will not lose their residency by traveling abroad, as long as such travel is exclusively part of their military commitments. Military personnel, however, who are not bona fide residents will not gain such residency exclusively through their military commitments.

Also, couples who are married and file joint returns file the return applicable to the spouse with the higher income. As an example, John works as a consultant in the U.S. and makes $70,000 annually. His wife is a citizen and bona fide resident of the CNMI; her job provides her with an annual income of only $28,000. This hypothetical couple will file a joint return in the U.S. and must claim the entire $98,000.

For Incomes with Nothing Withheld

In certain cases, residents bona fide or not, may be required to pay estimated CNMI tax on income that has had nothing withheld. This includes self-employment taxes or taxes on such income as from rental properties, prizes won or any asset sales. Some residents may also be required to pay Medicare taxes.

The IRS's Publication No. 570 (found here), contains additional information on what is pertinent to taxpayers in the CNMI.

Note: States & U.S. territories may make changes to their tax laws with little notice. We do our best to keep this information up-to-date, but it is provided on an "AS IS" basis. For more see our terms.

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