US Virgin Islands Residence for US Tax

Summary

A US citizen or resident who is a bona fide resident of the US Virgin Islands for the whole tax year files one income tax return, with the Virgin Islands, and pays income tax only there. To have that status you must pass three tests each year. The best known is the presence test: at least 183 days in the Virgin Islands in the tax year. It is a number to reach, not a limit. You also need no tax home outside the islands and no closer connection to the United States or a foreign country. The rule is US federal law.

Target

At least 183 days in the US Virgin Islands

Period

The tax year, for most people 1 January to 31 December

A day counts when

You are physically in the Virgin Islands at any time during the day

Other tests

No tax home outside the islands, no closer connection elsewhere

Law

Internal Revenue Code sections 937 and 932, Regulations 1.937-1

Run by

The IRS and the Virgin Islands Bureau of Internal Revenue

Who it applies to

• US citizens who move from a US state to St Thomas, St Croix or St John and want to file only with the Virgin Islands.
• Business owners and investors who moved to the islands and must show their residence year after year.
• People from the islands who work for part of the year in a US state.
• Charter crews and other people whose work moves between the islands, the United States and other countries.
• People in the year they arrive or leave, when a special rule for the move applies.

The rule

The US Virgin Islands are a US territory with their own tax office, the Virgin Islands Bureau of Internal Revenue. Section 932(c) of the Internal Revenue Code says that a bona fide resident of the Virgin Islands for the entire tax year files the return with the Virgin Islands. If that person reports income from all sources on that return, names the source of each item and pays the tax in full, the income is left out of US income tax. Bona fide means real, in good faith.

A US citizen or resident who is not a bona fide resident for the whole year but has Virgin Islands income is in a different position under section 932(a) and (b). That person files with both the United States and the Virgin Islands and uses Form 8689 to work out which share of the tax goes to the islands.

Section 937 of the Code and section 1.937-1 of the Treasury Regulations set three tests for bona fide residence. The first is the presence test. A US citizen or resident passes it in any one of five ways: at least 183 days in the Virgin Islands in the tax year, at least 549 days there in the tax year and the two years before with at least 60 days in each year, no more than 90 days in the United States in the tax year, no more than 3,000 US dollars of US earned income together with more days in the islands than in the United States, or no significant connection to the United States. A significant connection is a permanent home in the United States, a current voter registration there, or a spouse or child under 18 whose main home is there.

The second test is the tax home test: you had no tax home outside the Virgin Islands at any time in the year. Your tax home is your regular or main place of work, or the place where you regularly live if you have no main place of work. The third is the closer connection test: your ties to the Virgin Islands were not weaker than your ties to the United States or to a foreign country. The ties compared include your permanent home, family, belongings, banking and voter registration.

Why it exists

A bona fide resident deals with one tax office, the one on the islands, and not with the IRS. That makes a claim of island residence valuable, and it has to be possible to check it. Section 937, added to the Code in 2004, gives a test that can be checked: a number of days, and two questions about where a person works and where the centre of their personal life is.

Counting the days

You count days of physical presence in the US Virgin Islands in the tax year. Any part of a day is a day, so the days you arrive and leave both count.

1. Mark every day on which you were on St Thomas, St Croix, St John or elsewhere in the Virgin Islands at any time of day.
2. A day spent partly in the United States and partly in the Virgin Islands goes to the Virgin Islands.
3. Add days away for qualifying medical treatment, and days you had to stay away because of a declared major disaster or a mandatory evacuation.
4. IRS Publication 570 also lets you add up to 30 days spent outside both for business or personal travel, if you have more Virgin Islands days than US days.
5. Compare the total with 183. If you are short, test the other ways: 549 days over three years, or no more than 90 days in the United States.
6. Whatever the day result, check the tax home test and the closer connection test too, because all three are needed.

Examples

Reaching 183 days on the islands

Grace moved from Texas to St Croix in 2023 and works from an office in Christiansted. In 2026 she is in the Virgin Islands from 1 January to 20 July without a break, which is 201 days, and then travels for most of the autumn. She passes the presence test on 2 July, her 183rd day. Her work and only home are on St Croix, so she can pass the other two tests too.

Too few island days, but few US days

Marcus is a charter captain based on St Thomas. In 2026 he is in the Virgin Islands on 150 days, in the United States on 80 days and in the British Virgin Islands and other foreign places on 135 days. He does not reach 183 days. But he was in the United States on no more than 90 days, which is another way to pass the presence test. He still has to show that his tax home and closer connection are in the US Virgin Islands and not abroad.

The day counts, but the other tests fail

Olivia spends 190 days in a rented flat on St John in 2026. Her employer's office, where she works for the rest of the year, is in Atlanta, and her husband and house are there. She passes the presence test with 190 days. She fails the tax home test, because her main place of work is outside the islands, and most likely the closer connection test as well. She is not a bona fide resident for 2026 and files with the United States, with Form 8689 for any Virgin Islands income.

Exceptions

• Stops in the United States of less than 24 hours on the way between two places outside the United States are not counted as US days.
• A seafarer is not treated as having a tax home outside the islands only because of work on a ship that is used mainly in local and international waters.
• In the year you move to the Virgin Islands, you can pass the tax home and closer connection tests for the last 183 days of the year only, if you were not a bona fide resident in the 3 years before and are one in each of the 3 years after.
• If your income from the whole world is more than 75,000 US dollars in the year you say you became or stopped being a bona fide resident, you must file Form 8898. The penalty for not filing is 1,000 US dollars.
• A person who is not a US citizen or resident uses the Substantial Presence Test with the Virgin Islands in place of the United States, not the five ways above.

Common misconceptions

“The 183 days are a limit I must stay under.”

It is the other way round. Here 183 days in the Virgin Islands is a number you want to reach, because it supports your claim to be a resident of the islands.

“Days in the US Virgin Islands are days in the United States for tax.”

No. For this test and for the Substantial Presence Test the United States means the 50 states and the District of Columbia. A day in the Virgin Islands is not a US day.

“Once I am a bona fide resident, I keep the status until I move away.”

The three tests are applied again for every tax year. One year with too few days and no other way through the presence test, or a new job in a US state, ends the status for that year.

“A bona fide resident never deals with US income tax again.”

The income is left out of US tax only when you report all of it on the Virgin Islands return, name the sources and pay the tax due. If one of those is missing, the United States can tax the income.

Questions and answers

Does a day trip to Puerto Rico or to the British Virgin Islands break my count?

No. If you were in the US Virgin Islands at any time that day, the day counts. A full day spent elsewhere is simply not added, unless it falls under the 30 days of travel outside both the islands and the United States.

Where does a bona fide resident of the Virgin Islands file?

With the Virgin Islands Bureau of Internal Revenue, on a return that reports income from all sources. A bona fide resident for the whole year who does this and pays the tax normally files nothing with the IRS for that year.

Can I pass the presence test with fewer than 183 days?

Yes, in four other ways. The two most used are 549 days over three years with at least 60 days in each, and no more than 90 days in the United States in the tax year.

Do weeks in hospital in Miami count against me?

No. Days away for qualifying medical treatment, which means care with a night in a hospital or hospice and the medically needed days around it, count as days in the Virgin Islands. Keep the doctor's signed statement.

Is the rule the same as for Puerto Rico?

The three residence tests are the same, because section 937 covers all US territories. The result is different. The tracker Puerto Rico Residence for US Tax leads to leaving Puerto Rico income out of a US return, while a Virgin Islands resident files with the Virgin Islands only.

Sources

• IRS Publication 570, Tax Guide for Individuals With Income From U.S. Territories
• Internal Revenue Code, 26 U.S.C. section 937, Residence and source rules involving possessions
• Internal Revenue Code, 26 U.S.C. section 932, Coordination of United States and Virgin Islands income taxes
• Treasury Regulations, 26 CFR 1.937-1, Bona fide residency in a possession

Read more: The 183-day rule: what it means and what it does not.

Other rules for United States

• Arizona Tax Residence 273 days in each calendar year
• California Tax — Visitors 181 days in each calendar year
• California Tax Residence 273 days in each calendar year
• Connecticut Tax — 30 Days or Fewer 30 days in each calendar year
• Connecticut Tax Residence 183 days in each calendar year
• Delaware Tax Residence 183 days in each calendar year
• Hawaii Tax Residence 200 days in each calendar year
• Idaho Tax Residence 270 days in each calendar year

See all trackers

This page explains the rule and how the days are counted. It is not legal or tax advice. The authority decides each case on its own facts.