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Hello Travelgurl. Nice transfer to the island.  I'm assuming your an active federal employee. If so, yes you will be paying tax deductions in any of the 50 states and its territories.  As you probably are aware Puerto Rico is an USA territory.  Uncle Sam going to collect their share...sadly.  Your DL is valid to drive in PR.. law is if you're residing beyond 120 days you are required to get your PR license. Not sure if your making your residency knowingly or discreetly beyond 120 days up to a year or so.  Either way if the Fed's knows where you are and you're staying for a year, then just replace your DL.  Not difficult to do. If and when you return homebound you can again get your state DL.

I know it sounds silly, but I'd like to maintain my voting status by maintaining my current residency.  Also, my current state does not have a state income tax.

You won't be able to vote for the presidential election, I believe.  I was going to say that for 2015 taxes you would have to pay partial year taxes for your state but won't be doing that.  You will be paying Federal taxes, though.

As a military family, we can maintain our Alaska residency and participate in AK state elections and presidential elections via absentee ballot.  I would imagine that federal employees maintaining their state residency would be similar.

We can also keep our AK drivers license and vehicle registry - as a federal employee you should look into whether or not you have to get a PR license and tags - makes things easier.

Thank you, trekrider, for clearing that up about voting

Piggybacking on this question even though it's not really related.....we planned on becoming PR residents just to avoid paying federal taxes, however the state taxes (at least what they take from my paychecks) are way higher than federal deductions when I was stateside. As PR residents, do we file a separate PR return and will I ever see any of that come back in the form of a refund? In the US, we have a typical American income, but because the majority of the island is at or below the poverty level, I wonder if that bumps us into a higher income bracket.

You contact your last state of residency, and get yourself an absentee ballot. Very easy to do; it does not matter if you're here a year, or ten years... as long as you are here, and had a mainland residency, you CAN vote.

Unless you're in the military, voting absentee in a US jurisdiction other than PR while a resident of PR constitutes the crime of voter fraud.

Regarding Taxes:  Residency is defined as the place where YOU intend to permanently reside.  There are a couple of tests commonly used by tax authorities to define that.  If you are in a place more than 183 days (1/2 year) you are presumed to be a resident and taxable in that jurisdiction.  It is possible to avoid PR residency if you are in fact on a temporary assignment but you must be prepared to have a tax adviser argue that. 

Puerto Ricans are subject to PR income tax on PR sourced income and U.S.Federal and state Income tax on U.S. sourced income.  The correct question to ask of your employer is whether your income is paid out of the US or PR and whether it will be considered US or PR income.  You may have to file both PR and US returns.

PR Tax rates are similar to but less than Federal rates and there is no equivalent to a state tax here.   So in New York (for example) you might be subject to a 35% Federal rate and an 8% NY rate for a total of 43%.  In PR you might be subject to a 30% PR tax and no state tax for a total of 30%.  The rates of course depend on your income. While it is more complicated than that, it may be better to have PR vs US income.  Be aware that PR is in a financial crisis and taxes are changing.  Higher sales (or VAT) taxes are being brought in along with somewhat lower income taxes.