US Virgin Islands — Bona Fide Residency (§937 Presence Test)

Summary

Primary test

≥183 days in the USVI in the tax year

Window

Calendar (tax) year, 1 Jan – 31 Dec

Counting

Present any part of a day = counted (arrival + departure)

Full test

Presence + tax home + closer connection (all three)

Basis

IRC §937(a); Treas. Reg. 26 CFR §1.937-1

Authority

U.S. Internal Revenue Service (IRS)

To be a bona fide resident of the US Virgin Islands under IRC §937(a), you must satisfy three independent tests for the tax year: the presence test, the tax home test, and the closer connection test. Only the presence test is a day count. Its clearest route is being present in the USVI for at least 183 days during the tax year (which, for almost every individual, is the calendar year). Bounded tracks that 183-day mark — but hitting it does not by itself make you a bona fide resident, because the tax-home and closer-connection tests are facts-based, not day counts.

Who it applies to

This matters most if you are:

• Relocating to St. Thomas, St. Croix, St. John, or Water Island and want to establish USVI tax residency.
• Applying for or holding Economic Development Commission (EDC) tax-incentive benefits, which rest on this same federal residency definition.
• A remote worker or business owner splitting time between the USVI and the mainland US, where every day on each side can tip a test.
• Filing a US territory return and needing to prove the year met the §937 tests.

It applies to individuals regardless of where they were born — USVI bona fide residency is about presence and the center of your ties for the tax year, not your nationality.

The rule — and why it exists

Bona fide residency is deliberately a three-part test. Under IRC §937(a) and Treas. Reg. §1.937-1, all three of the following must be true for the tax year:

• 1. The presence test. A day-count test — met by any one of five alternatives (below). This is the only limb Bounded can count.
• 2. The tax home test. You must not have a tax home outside the USVI. Your tax home is generally your main place of business or, if you have no regular workplace, where you regularly live.
• 3. The closer connection test. You must not have a closer connection to the United States (the 50 states and DC) or to a foreign country than to the USVI — judged on the whole picture: home, family, belongings, banking, registrations, and social ties.

The presence test is satisfied if any one of these five alternatives holds for the tax year:

1. 1At least 183 days present in the USVI during the tax year. (This is the alternative Bounded tracks.)
2. 2At least 549 days present in the USVI across the 3-year period of the current tax year and the two immediately preceding years, with at least 60 days present in the USVI in each of those three years.
3. 3No more than 90 days present in the United States (the 50 states and DC) during the tax year.
4. 4No more than $3,000 of US-source earned income during the year, and more days present in the USVI than in the United States.
5. 5No significant connection to the United States during the tax year (no US permanent home, not registered to vote in the US, and no spouse or dependent minor child whose main home is in the US — subject to exceptions).

Why it works this way: the USVI has its own tax system, and the three tests together stop the benefits of USVI residency from being claimed by someone whose life and business are really based on the mainland or abroad. The presence test proves you are physically there; the tax-home and closer-connection tests prove your economic and personal center of gravity is genuinely in the territory.

Counting the days

For the 183-day alternative, you count the calendar days you are physically present in the USVI during the tax year. The counting rule is the "present at any time during the day" rule of Treas. Reg. §1.937-1(c)(3) — not a midnight rule.

1. 1Count every calendar day you are physically present in the USVI at any point — even briefly.
2. 2Both your arrival day and your departure day count as full presence days.
3. 3The tally is per tax year and resets each 1 January (the tax year is the calendar year for essentially all individuals).
4. 4Reaching at least 183 days satisfies the presence-test day count for the year — exactly 183 is enough, since the rule is 'at least 183'.

The separate ≤90 US-days alternative counts something different: days in the United States specifically (the 50 states and DC), not all days outside the USVI. Days spent in a foreign country are neither USVI days nor US days for this test — so a plain "days away" count would misfire. Bounded models the 183-day route because it is the clearest and always-conservative one: if it says you are covered, you have met the presence-test day count.

Examples

Example 1 — clean 183-day resident

Maria moves to St. Croix on 1 March 2026 and is present in the USVI for 205 days that year. Her only office is on St. Croix (tax home in the USVI), and her home, family, and bank accounts are all there (closer connection to the USVI). She passes all three §937 tests and is a bona fide resident for 2026.

Example 2 — enough days, but the wrong center of gravity

David spends 190 days on St. Thomas but keeps his main business, his family home, and his voter registration in Florida. He clears the 183-day presence alternative, yet his tax home and closest connections are still in the United States, so he fails the other two tests. The day count alone does not make him a bona fide resident.

Example 3 — under 183 days, resident by another alternative

Priya is present in the USVI for only 150 days in 2026, but she spends just 40 days in the mainland US and the rest of the year travelling abroad. Because she is in the United States for no more than 90 days, she meets the presence test through the ≤90-US-days alternative — even though she is short of 183 USVI days. Bounded would show her under the 183-day mark, so this is a case to check against the other alternatives.

Exceptions & edge cases

• The presence test is only one of three. Passing 183 days does not confer bona fide residency on its own. The tax-home and closer-connection tests are facts-based and must also be met — treat the day counter as one input, not the verdict.
• Excluded US-presence days. For the ≤90-US-days alternative, some US days do not count: brief transit of under 24 hours between two points outside the US, days you intended to leave the USVI but could not due to a qualifying medical condition, days present as a student or as an elected/appointed government official, days competing in a charitable sports event, and certain disaster or evacuation days.
• The 549-day / 3-year route has a floor. That alternative needs at least 549 USVI days across three years and at least 60 days in each of those years — a single rolling total cannot capture the per-year floor, so it is best checked by hand.
• Foreign days are not US days. Time in a third country counts toward neither the USVI total nor the US total. Only mainland (50 states + DC) days count as US days.
• Year-of-move relief. Special rules soften the presence test in the first and last year of a move to or from the USVI; the day counter targets a full residency year, so treat move years separately.
• Fiscal-year filers. The tax year equals the calendar year for essentially all individuals. A rare fiscal-year filer would measure against their own tax year instead.

The day count is the part you can plan and prove precisely. Where professional advice genuinely earns its keep is on the tax-home and closer-connection tests, the $3,000 earned-income figure, and how the year-of-move rules apply to your specific situation — these turn on facts, not just the calendar.

Common misconceptions

• "183 days makes me a resident." False — it only meets the presence test. You still need a USVI tax home and closer connection to the USVI.
• "183 is the only threshold." No — the presence test has five alternatives (183; 549 over 3 years with 60 each; ≤90 US days; ≤$3,000 US earned income plus more USVI days; no significant US connection). Any one suffices.
• "Every day outside the USVI is a US day." No — only days in the 50 states and DC are US days. Foreign days count for neither total.
• "A partial day doesn't count." It does — presence at any time during a day counts, and both arrival and departure days count in full.
• "Being under 183 days means I'm definitely not a resident." Not necessarily — you may still pass through the 549-day, ≤90-US-days, earned-income, or no-significant-connection alternative.

Frequently asked questions

Sources

• IRS — Publication 570 (Tax Guide for Individuals With Income From U.S. Territories)
• Treasury Regulation 26 CFR §1.937-1 (Cornell LII)
• IRS — Individuals living or working in a U.S. territory