Consortium creates another shitstorm

The Governor specifically called out that article today in his press conference - said they are printing checks as he speaks, trying to mail between $5-8 Million dollars a week and he was not sure why the Consortium would write their piece.

Time will tell I imagine.

Well, the Consortium does have a video of the Director of the IRB saying that the checks will start going out next month (recorded May 7th it seems) and saying the 'bulk' of the checks will be out in four months.  I hope they can figure out how to get them out faster.  There are a lot of people who haven't had a dime of income in months and they are getting pretty desperate.  If anyone has a neighbor that is suffering and can help them out I hope to see that happen.  I know on St. John there are some community programs and grassroots efforts to try and reach the people who need help.  

I'm trying, as I'm sure many people are, to get to the facts.  First and foremost, is the money in the hands of the USVI government or is it still being held up by Uncle Sam?  Second, how many checks are we talking about?  Somewhere I read that there are currently about 7,500 people on unemployment on STX (not sure if this is exactly correct), if it's close that doesn't seem like a large number of checks.  I assume that the check writing is done by computer and that the 7,500 people are already in the unemployment computer system, along with their eligible amounts.  To me it only seems reasonable that once the data is in the system, printing 7,500 checks is a matter of minutes or a hour at the outside.

I don't understand $5M a month or even a week, that's a very strange metric.  It's not the dollar amount, it's the numbers of people and what the Government is obligated to pay them.  My kid's had the $1,200 CARES Act money in their checking accounts a couple of weeks ago.  I've never seen the Federal Government act so fast.

I'm a pretty conservative guy, I don't like hyperbole (and therefore most of the media) but this is a true economic/humanitarian emergency and action is needed now.  Let me quote Sir Winston S. Churchill, "sometimes doing your best isn't good enough, sometimes you must do what is required".  This is the attitude/commitment we need from the Government at this moment.

People were getting their checks yesterday. Pictures were posted. 

@jaldeborgh The checks being discussed are not unemployment they are the CARES Act money. CARES as you know is attached to SS# and your income tax return is being used to determine eligibility therefore processed by IRB. Since we cant file electronically everything is done stone tablet and chisel style and paper checks are being mailed. I did see where some people have started to receive them. Yes the VI has the money. The feds transferred it to the VI a week ago. 

The rationale behind rolling the checks out over a period of time was discussed by Bryan in one of his COVID presentations. The concern is banks being overrun with people all trying to deposit checks at the same time. Banks are highly restricting how many people can enter their service areas. 

VI has the money and a rollout strategy that many don't like.

@janeinstx Thanks for the clarification and I'm sure there is a bureaucratic minefield to navigate.  Do you know how the federal government calculated the amount to send to the USVI government?  I'm only guessing, but one option would be to take last years (2018) tax records, which must be on a computer somewhere, and using the SS#'s, names and addresses, plus the corresponding income data to make a calculation.  If this kind of approach was used then this bottoms up list/data could then be supplied to the USVI Government for quick verification.  This would be a great starting point for the local government as it's a list of SS#'s, names, incomes and CARES distribution amounts, backed up with funds already provided by the Federal Government.  Also, given that the 2019 tax year filing deadline is now in July, it would seem likely the 2018 tax data is the basis for the distributions.

I'm not being argumentative and I'm sure it's more complicated than I'm making it sound, but I have a bias for action.  I'm only interested in helping those in need as quickly and efficiently as possible.

Yes. They are solely using 2018 tax returns. It was up to the local government to provide documentation of how much money they needed.  This took time because not only were not all of the 2018 returns imputed, they are still receiving them because people not required to file (no income/social security recipients) were asked to file a zero tax return for 2018 so they could get the stimulus check.

I’m calling BS on their reasoning for doling out the checks slowly though.  Almost all of the banks here have mobile apps for depositing checks.  And if we were going to cause a ‘rush’ at the banks, it makes a hell of a lot more sense to do it before we invite the world back to visit when we will surely see the COVID numbers rise significantly.  Seems to me they would like to hold on to that money as long as possible and earn some interest on it.  So many people here are at the ends of their means.   

Posted by: @stjohnjulie

Almost all of the banks here have mobile apps for depositing checks.

It always surprises me how many local folks line up in a bank to do what can be done electronically. Old school I guess. But, life is too short to spend it in a bank line up.

@vicanuck and how many people still want paper checks. Half the staff where i work won't do direct deposit. 

Posted by: @stxsailor

@vicanuck and how many people still want paper checks. Half the staff where i work won't do direct deposit. 

I know...so weird. I hate wasting time in banks. I guess its a social thing for some.

The IRB isn’t set up for direct deposit payments.   Considering how far behind hey seem to be with everything it would take them forever to get it set up.  I cannot even tell you how many times I get delinquency notices from them for taxes that have been paid on time.  If you don’t have your stamped copy of the form they will hit you.  Canceled checks don’t even work.  

Posted by: @stjohnjulie

The IRB isn’t set up for direct deposit payments.   Considering how far behind hey seem to be with everything it would take them forever to get it set up.  I cannot even tell you how many times I get delinquency notices from them for taxes that have been paid on time.  If you don’t have your stamped copy of the form they will hit you.  Canceled checks don’t even work.  

VI is so backwards and antiquated that i gave up venting on the subject. Kills productivity and breeds mediocracy. “One hundred years behind Madagascar” as the saying goes in my fatherland. 

@STTsailor LOL  I gave up complaining about it many many moons ago.  I just cover my butt now because I know how things seem to go and try and educate others on how to do the same.  I save my b!tching for people who should file here, but file in the states, then complain about infrastructure here.   If I ever get to 'retire' from my regular job, I thought I might apply at the IRB or the DLCA.  Even if I was just pushing paper or answering the phone I feel like I could do it with more enthusiasm than some of the people I've encountered over the years.  

It's that bona fide VI residency status that keeps many from interfacing with the IRB.

For example, as long my income comes from the US - even if I live full-time in the VI - I am required to file with the IRS and not the IRB. In my case, FL is my tax home because that's where my employer is located.

The VI's EDC program is a significant contributor to this.

I retire next March 1st (2021), at that point I won’t have an employer, although I will have rental income and possibly some occasional consulting income from the mainland along with Social Security and passive income from savings.  Will that disqualify me from becoming a STX tax resident, assuming I meet the >6 months time requirement?

It is my understanding that if you are a bona fide resident of the USVI you are to pay all of your income taxes to the USVI regardless of where that income is derived from.  So you may want to check with a local tax accountant to get clear on that.  A stateside accountant, nor the IRS, will not be able to answer that question effectively for you.  

" In contrast, a bona fide Virgin Islands resident files a return only with the BIR and pays tax on all income, regardless of its source, to the Virgin Islands.  I.R.C. § 932(c). By paying the BIR the tax on all worldwide income, a bona fide Virgin Islands resident is relieved of any income tax liability to the United States, even on non-Virgin Islands source income."

I have two clients who live here full time with stateside income and they both use local accountants to prepare their taxes and they both pay all taxes here to the IRB on all of their income.  And another client who doesn't live here 6 plus months, but has income from here, so they file to the IRS and the IRB on form 8689 for the income they have from here.   I'm not an accountant... just a keeper of the books.  

Posted by: @stjohnjulie

It is my understanding that if you are a bona fide resident of the USVI you are to pay all of your income taxes to the USVI regardless of where that income is derived from.  So you may want to check with a local tax accountant to get clear on that.  A stateside accountant, nor the IRS, will not be able to answer that question effectively for you.  

" In contrast, a bona fide Virgin Islands resident files a return only with the BIR and pays tax on all income, regardless of its source, to the Virgin Islands.  I.R.C. § 932(c). By paying the BIR the tax on all worldwide income, a bona fide Virgin Islands resident is relieved of any income tax liability to the United States, even on non-Virgin Islands source income."

 

I have two clients who live here full time with stateside income and they both use local accountants to prepare their taxes and they both pay all taxes here to the IRB on all of their income.  And another client who doesn't live here 6 plus months, but has income from here, so they file to the IRS and the IRB on form 8689 for the income they have from here.   I'm not an accountant... just a keeper of the books.  

According to the IRS, to be a bona fide resident you have to meet 3 tests.

The tax code defines a “bona fide resident” as a person who

1) is present for at least 183 days during the tax year in the Virgin Islands;
2) does not have a tax home outside the Virgin Islands during the tax year and
3) does not have a closer connection to the U.S. or a foreign country than to the possession.

A person's tax home is the city or general vicinity where his or her primary place of business or work is located, regardless of the location of the individual's residence.

If you are a remote worker whose employer is on the mainland you will not pass the tax home or closer connection tests. Consequently, you cannot be a bona fide resident of the VI for tax purposes.

The IRS code is quite clear about this. Though this is mostly about earned income from a job.

If you have VI income you report that to the IRS and IRB. But that still doesn't mean you qualify as a bona fide resident.

Once you prove to the IRS you are a bona fide VI resident, you retain that status until you move from the territory. Here's the form you have to complete for the IRS to request consideration to become a bona fide resident of the VI. 

https://www.irs.gov/pub/irs-pdf/f8898.pdf

So if you've already attained bona fide residency status, then your worldwide income is then taxed exclusively by the IRB. 

Your worldwide individual income must be more than $75,000 or you won't need to complete this form. Each spouse's income is considered separately.

https://www.irs.gov/instructions/i8898

@gators_mom This is good/interesting info. You seem to know this stuff, so may I ask you a question, assuming you might know the answer? If I were to live in the USVI full time and draw a state retirement from my home state, where does that leave me in regards to taxes? Just curious, so a very short answer is all I'd bother you with! 🙂 I'll do detailed research with a VI tax guy when I'm there in July on a PMV, but generally speaking......where do I file and who gets the taxes? Thanks in advance!  

Income taxes from your stateside pension will be paid to the IRB (internal revenue bureau, USVI). You taxes here will mirror the federal taxes paid stateside. No state tax here.

Full-time residence is a fuzzy topic. Officially it’s 365/2=182.5 days. We had our home here for three years prior to the final move, so we had tax bills here already. It’s difficult to prove when we were “officially” full-time.

Within the first week of our permanent move down, we went to the Bureau of Motor Vehicle (BMV) and transferred our stateside drivers license to a VI license. Then drove directly from BMV to the tax assessors office for the $400 property tax reduction for full-time residents.

Taxes generally aren’t a big deal here. Wind storm insurance, WAPA, that’s another story...

Posted by: @icatchbadguys

@gators_mom This is good/interesting info. You seem to know this stuff, so may I ask you a question, assuming you might know the answer? If I were to live in the USVI full time and draw a state retirement from my home state, where does that leave me in regards to taxes? Just curious, so a very short answer is all I'd bother you with! 🙂 I'll do detailed research with a VI tax guy when I'm there in July on a PMV, but generally speaking......where do I file and who gets the taxes? Thanks in advance!  

If your income is from retirement/pension/social security and you live full-time (at least 183 days per year in the VI), you'll pay taxes to the VI as a bona fide resident. If your personal income exceeds $75K per year, you'll need to tell the IRS of your residency change by filing form 8898. Once you're a bona fide resident you retain that status until you move from the territory.

It gets more complicated if you have earned income.

@singlefin Thanks for the info. Very helpful!

@gators_mom Thank you for the response! That gives me a decent picture, generally speaking. IMO it's good to get person to person info and do a little research before speaking to a local tax pro on the subject. Sometimes it prompts questions I might have for them. And if nothing else, it lets you gauge their competence a bit when bringing up certain specifics. Thanks again!