US Virgin Islands bona fide residence and residence-change reporting reference checked in October 2026. Explains the separate presence, tax-home and closer-connection requirements, alternative presence tests for US citizens and resident aliens, and the distinction between residence and income sourcing. Covers arrival-year and departure-year exceptions and Form 8898 reporting triggers, individual income thresholds and separate filing. Uses current statutory text and IRS instructions, with examples that distinguish passing one test from proving residence. Excludes nonresident-alien and military special cases from the ordinary workflow. Independent accountant review and regulatory amendment reconciliation remain outstanding.
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Accountant-authored. Written and published by Ryan Duguid, an accountant approved on OpenAccountants. Their licence number is not on file. Their registration is in Australia; this skill covers VI. General reference material, not advice on your specific facts; don't file, pay, or take a position on it without a professional reviewing your situation.
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| Route | Condition |
|---|---|
| Annual presence | At least 183 days in the USVI in the tax year |
| Three-year presence | At least 549 USVI days across the current and two preceding tax years, with at least 60 days in each year |
| Limited US presence | No more than 90 days in the United States in the year |
| Limited US earned income | No more than $3,000 US earned income and more days in the USVI than in the United States |
| No significant US connection | No significant connection to the United States during the year under the defined test |
Under 26 USC 937(a), bona fide residence requires the presence condition, no tax home outside the territory and no closer connection to the United States or a foreign country than to the territory, subject to regulatory exceptions. The statutory text retrieved for this Guide states currency through Public Law 119-121, 9 October 2026. IRS Publication 570, chapter 1 explains the tests and exceptions.
This Guide concerns the US Virgin Islands (VI), not the British Virgin Islands (VG). The following ordinary presence alternatives are for US citizens and resident aliens. Nonresident aliens have a different presence procedure; military personnel and spouses have special rules. Establish the person's status before selecting a test. Form 8898 instructions, Bona Fide Residence.
For a US citizen or resident alien, the IRS instructions permit any one of these routes:
| Route | Condition |
|---|---|
| Annual presence | At least 183 days in the USVI in the tax year |
| Three-year presence | At least 549 USVI days across the current and two preceding tax years, with at least 60 days in each year |
| Limited US presence | No more than 90 days in the United States in the year |
| Limited US earned income | No more than $3,000 US earned income and more days in the USVI than in the United States |
| No significant US connection | No significant connection to the United States during the year under the defined test |
Source: Publication 570, Presence Test and Form 8898 instructions. Meeting an alternative satisfies the presence component only. The tax-home and closer-connection requirements still need their own findings.
Example: 183 established qualifying USVI days passes the annual presence threshold. It does not prove the tax-home condition. A three-year record of 180, 190 and 179 qualifying days totals 549 and meets the 60-day annual minimum. A record of 245, 245 and 59 also totals 549 but fails that annual minimum. Another presence route must then be considered rather than declaring residence solely from the sum.
The tax home ordinarily concerns the regular or principal place of business, employment or post of duty; the rules also address a person without such a place. Closer connection considers the person's overall ties, including home, family, possessions, social and business relationships and official documents. The no-significant-US-connection alternative above is a separately defined presence route, not a substitute name for the closer-connection test. Publication 570, Tax Home and Closer Connection tests.
Count actual travel first, then document any applicable exception. Publication 570 contains rules for part-days, medical treatment, disasters, transit, students and other circumstances. This Guide does not treat all days abroad as days in the USVI or automatically exclude every transit day.
The Form 8898 instructions, Exception for the Year of the Move provide an exception to the tax-home and closer-connection tests on moving to the territory if all of these hold: no bona fide residence there in any of the previous three tax years; neither an outside tax home nor a closer outside connection during any part of the final 183 days of the move year; and bona fide residence for the next three tax years.
For a move from the USVI, the corresponding requirements are bona fide residence for the preceding three years, neither an outside tax home nor a closer outside connection during any part of the first 183 days of the move year, and no bona fide residence there in any of the next three years. These exceptions do not waive the presence test. Future-year facts can affect the conclusion. Do not equate a moving date with automatic full-year residence.
The Form 8898 instructions, Who Must File require the form where worldwide gross income exceeds $75,000 and the specified reporting-history/change-position condition applies. For an arrival, this includes taking the position that USVI bona fide residence began after a year filed as a US citizen/resident but not a bona fide USVI resident. For departure, it includes a US citizen/resident taking the position that residence ended after a year filed as a bona fide resident. Other specified territory-to-territory moves require separate review.
Gross income is measured before deductions and excludes the spouse's income for this threshold. Exactly $75,000 does not exceed it. Each spouse who meets the conditions files a separate form. The form is due by the Form 1040 due date including extensions and is filed separately from the income-tax return; the IRS also provides an online form. Instructions, Worldwide gross income and When and Where To File.
Retain a travel ledger, work-location evidence, housing and family facts, contracts, prior returns and the source analysis for income as recommended working papers. Section 937(b) separately governs income sourcing; becoming resident does not automatically convert US-source income into USVI-source income. Section 937.
Checked 22 October 2026. Publication 570 retrieved is the 2025 edition and Form 8898 instructions are revised October 2024. This is a source-cited draft, not a completed residence opinion. Full regulatory amendment reconciliation and independent accountant review remain outstanding.
Contributed by Ryan Duguid.
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