Taxes imposed on residents of the Virgin Islands include:
- Federal Income Tax (same as US mainland)
- Property Tax
- Employers are required to remove social security, Medicare and income tax from employee pay. (same as US mainland)
There is no state tax in the U.S.V.I.
Important Notes on Income Tax for New Residents
(Information provided by Internal Revenue Service)
An important factor in Virgin Islands taxation is whether, on the last day of the tax year, you are a bona fide resident of the Virgin Islands. If you are a temporary worker on the last day of the tax year, you may or may not be a bona fide resident of the Virgin Islands. You should contact the Virgin Islands Bureau of Internal Revenue for more information.
Resident of the Virgin Islands
If you are a bona fide resident of the Virgin Islands on the last day of the tax year, you must file your tax return on Form 1040 with the Government of the Virgin Islands and pay the entire tax due to the Virgin Islands. You do not have to file with the IRS for any tax year in which you are a bona fide resident of the Virgin Islands on the last day of the year, provided you report and pay tax on your income from all sources to the Virgin Islands and identify the source(s) of the income on the return. If you have non-Virgin Islands source income, you must also file Virgin Islands Form 1040 INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. You can get Form 1040 INFO by contacting: Virgin Islands Bureau of Internal Revenue
Non-Virgin Islands Resident with Virgin Islands Income
If you are not a bona fide resident of the Virgin Islands on the last day of your tax year, you must file identical tax returns with the United States and the Virgin Islands if you have:
- Income from sources in the Virgin Islands, or
Income effectively connected with the conduct of a trade or business in the Virgin Islands
File the original return with the United States and file a copy of the U.S. return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue by the due date for filing Form 1040.
The amount of tax you must pay to the Virgin Islands is figured as follows: V.I. AGI divided by worldwide AGI times total tax on U.S. return (after certain adjustments)
Form 8689, Allocation of Individual Income Tax to the Virgin Islands is used for this computation. You must complete this form and attach it to each copy of your return. You should pay any tax due to the Virgin Islands when you file your return with the Virgin Islands Bureau of Internal Revenue. You receive credit for taxes paid to the Virgin Islands by including the amount on Form 8689, line 32, in the total on Form 1040, line 65. On the dotted line next to line 65, enter “Form 8689” and show the amount.
Do not enter the amount from Form 8689, line 36 on Form 1040.
Where to File
If you are not a bona fide resident of the Virgin Islands but you have income from the Virgin Islands, you must file Form 1040 and all attachments with the Internal Revenue Service Center, Philadelphia, PA 19255-0215, and with the Virgin Islands Bureau of Internal Revenue.
If you are a bona fide resident of the Virgin Islands you should file your return with:
Virgin Islands Bureau of Internal Revenue
9601 Estate Thomas
St. Thomas, U.S. Virgin Islands, 00802
