Form W‑2VI – Virgin Islands Wage Reporting Guide

I still remember a January call from a firm partner on St. Thomas. It was 9 p.m., the team was tired, and W‑2VIs were stuck in review because no one could agree on who needed a Virgin Islands statement versus a federal W‑2. If that sounds familiar, take a breath.

You can get W‑2VI right without late nights or guesswork. This guide gives you clear rules, real timelines, and a workflow you can run with confidence.

Key Takeaways

• Form W‑2VI reports wages, tips, and Virgin Islands income tax withheld for services performed in the U.S. Virgin Islands, and it is filed with the Social Security Administration.
• Employee copies are generally due by January 31. For the 2025 wage year, SSA filing is due Monday, February 2, 2026, because January 31 falls on a weekend.
• You must e‑file if you file 10 or more total information returns, counting W‑2s and other returns together, unless you have a waiver or exemption.
• Bona fide USVI residency and source rules come from IRC §937 and Publication 570. Apply presence, tax home, and closer‑connection tests, then source wages to where services were performed.
• Form 8689 is for non‑residents with USVI‑source income. Coordinate W‑2VI withholding and Form 8689 credits to avoid double counting.

If you remember one thing, remember this, match the form to where the work was performed, then apply residency rules to avoid duplicate reporting.

What Is Form W‑2VI

Form W‑2VI is the Virgin Islands version of Form W‑2. You use it to report wages, tips, and other compensation for services performed in the U.S. Virgin Islands, along with Virgin Islands income tax withheld. Employers file Copy A with the Social Security Administration and furnish copies to employees. Do not use W‑2VI to report wages subject to U.S. federal income tax withholding, use the regular W‑2 for that.

The 2025 Filing Calendar, At A Glance

• Employee furnish date, Friday, January 31, 2026, or the next business day when applicable.
• SSA filing due date for 2025 Forms W‑2VI, Monday, February 2, 2026, paper or electronic.
• Extension to file with SSA, one 30‑day extension via Form 8809, not automatic, granted only for specific reasons such as extraordinary circumstances. This does not extend the employee furnish date.

Item	Standard rule	2025 wage year example
Furnish W‑2VI to employees	Generally by January 31	Friday, Jan 31, 2026, weekend rule may move business actions to Monday
File Copy A with SSA	Same season as W‑2, date set by IRS regs	Monday, Feb 2, 2026
File method	E‑file required at 10+ total information returns	Use SSA BSO or approved software
Extension to file with SSA	Not automatic, Form 8809, up to 30 days for qualifying reasons	Request by due date, furnish date not extended

Sources, IRS General Instructions for Forms W‑2 and W‑3, Topic 803, and USVI BIR reminders for furnish dates.

Why This Matters

W‑2VI errors create real pain, rejected SSA files, amended returns, frustrated employees, and avoidable penalties. When you anchor decisions to the correct rules, residency status, and work location, you avoid duplicate withholding on an employee’s return and you protect trust with your team and your clients. The rules are stable and well documented, you just need a clean process that everyone follows.

How W‑2VI Fits With SSA E‑Filing

The SSA encourages electronic filing. If you upload an EFW2 file through Business Services Online, you receive a receipt and quick pass or fail edits, often within a minute. Employers that file 10 or more information returns must e‑file unless a waiver applies. This threshold applies to Forms W‑2 and to most information returns in aggregate, so check your total count early.

Tip, do a dry run in December, confirm your BSO access, test an EFW2 sample, and validate SSNs with the SSA tool before you generate your live file.

Who Must File W‑2VI

If you paid an employee for services performed in the U.S. Virgin Islands, you issue a W‑2VI for those wages, regardless of where the employee lives. That keeps territory‑source wages tied to the Virgin Islands system and keeps federal W‑2 data clean for U.S. wages. The IRS page for W‑2VI confirms it is the wage statement you use for USVI wages and that federal wage withholding belongs on a regular W‑2.

Residency And Sourcing, The Two Checks You Always Run

• Residency under IRC §937, check presence, tax home, and closer connection. Publication 570 is your playbook for the detailed tests and exceptions.
• Where services were performed, wages are sourced to the location where the employee performed the work. Day counting matters for cross‑border work patterns.

Use both checks. First, identify the work location to determine whether a W‑2VI is required. Second, apply residency to understand how the employee will report territory income and whether Form 8689 comes into play on the individual return.

Quick Matrix, Residency And Reporting Path

Employee profile	Where work was performed	Employer form to issue	Employee reporting path
Bona fide USVI resident, all year	USVI	W‑2VI	Report wages under USVI rules per Pub 570, check if any federal reporting applies for other income
Nonresident of USVI	USVI workdays only	W‑2VI for VI‑source wages, separate W‑2 for U.S. wages if any	File U.S. Form 1040, attach Form 8689 to allocate U.S. tax to USVI for VI‑source income
Split‑year resident	USVI and U.S. workdays	W‑2VI for VI‑source wages, W‑2 for U.S. wages	Apply Pub 570 split‑year rules, allocate with Form 8689 as required

References, Pub 570, Individuals in U.S. Territories page, and About Form 8689.

Examples You Can Borrow

• You have a controller who spent February through June in St. Croix on site. Pay for those days belongs on a W‑2VI. Pay for stateside months belongs on a federal W‑2. The employee will likely attach Form 8689 to the U.S. return to allocate tax to the USVI.
• Your staff accountant moved to St. Thomas on January 1 and meets all §937 tests. All year’s wages for USVI work are on W‑2VI. No Form 8689 is required for a bona fide resident allocating tax, per IRS guidance.

When in doubt, document workdays and locations. Your reviewer can reconcile totals quickly when day counts are clear.

What To Put In Each Box

For W‑2VI, Box 1 shows wages, and Box 2 shows Virgin Islands income tax withheld. Boxes for Social Security and Medicare follow normal federal wage reporting rules because SSA processes the file. The IRS page for W‑2VI and the General Instructions for Forms W‑2 and W‑3 control how you populate the fields.

Common Setup Mistakes

• Using a federal W‑2 to report Virgin Islands withholding. The IRS says use W‑2VI for Virgin Islands wages and withholdings.
• Mixing U.S. wages with VI wages on one statement. Keep them separate, W‑2 for U.S. wages, W‑2VI for USVI wages.
• Missing the e‑file threshold. If you hit ten or more total information returns, you must e‑file unless you have a waiver or exemption.

Withholding, Form 8689, And How To Avoid Double Counting

The most common reconciliation issue is duplicate tax credits. Employers report Virgin Islands withholding in Box 2 of W‑2VI. Individuals who are not bona fide residents use Form 8689 to allocate U.S. income tax to the USVI on the personal return. If you put the same withholding on W‑2VI and then also try to flow that same amount through Form 8689 as an additional payment, you will overstate credits. Keep one clean path.

What Form 8689 Actually Does

Form 8689 lets a U.S. citizen or resident alien who is not a bona fide USVI resident compute the part of U.S. income tax that is allocable to the USVI. The form is attached to Form 1040. IRS guidance and the Internal Revenue Manual explain how the allocation and payment comparison works so the amount carried to the 1040 does not exceed payments to the USVI.

In plain English, Form 8689 prevents a taxpayer from claiming more credit to the USVI than the USVI actually received.

A Simple Walkthrough

• Employer issues W‑2VI that shows VI‑source wages and VI tax withheld in Box 2.
• Employee is a nonresident of the USVI. On the U.S. Form 1040, the employee attaches Form 8689 to allocate part of U.S. tax to the Virgin Islands. The credit that flows to the 1040 is limited by Form 8689’s comparison of tax allocation and payments to the USVI.
• Result, one clear trail of wages, withholding, and credit. No duplication.

Documentation To Keep

• Day counts and where services were performed.
• Residency evidence, presence test, tax home, and closer‑connection factors.
• Payroll proof that withholding remitted to the Virgin Islands matches W‑2VI Box 2 totals.
• If split‑year, a memo explaining your allocation method for cross‑border workdays.

Add a review step before you release employee copies, compare W‑2 totals, W‑2VI totals, and payroll deposits. This five‑minute check avoids amended forms and unhappy phone calls in February.

E‑File Options And SSA Acknowledgements

You have two main paths, file directly with the SSA through Business Services Online, or file through an approved software or provider.

Filing Directly With SSA BSO

• Use W‑2 Online for up to 50 W‑2s or 25 W‑2c at a time, or upload an EFW2 file for higher volumes.
• You get a receipt and edit results quickly, often in under a minute, which lets you fix errors before the deadline.
• The SSA and IRS now require e‑filing if you submit 10 or more information returns in total for the year, unless you have a waiver or exemption.

Filing Through A Provider

If you prefer a provider, you can still control timing. Many platforms let you schedule transmission, create a pre‑transmit edit window, validate addresses, and batch process large volumes. Providers also track SSA responses so your team is not refreshing status all day. Use those controls to lock accuracy without slowing your reviewers.

Reality check, the SSA’s systems provide a receipt and quick edit feedback on upload. A provider may add scheduling or batching on top, which is helpful for large firms, but you should still watch the statutory due date.

E‑File Threshold, Penalties, And Best Practices

• If you file 10 or more total information returns, you must e‑file your W‑2VI unless you have a waiver. This rule is enforced for the 2025 season.
• Do not file the same data on paper if you e‑file. Duplicate submissions can trigger contacts from SSA or IRS.
• Build a two‑step review, first validate SSNs and totals, then lock the file and transmit. Keep the audit trail in your workpapers.

Timeline Planner

Step	Owner	Target window	Notes
Confirm BSO access or provider setup	Payroll lead	Early December	Reset passwords and roles
Validate employee data and SSNs	HR + payroll	Mid December	Use SSA verification tools
Generate draft W‑2VI	Payroll	Early January	Reconcile to payroll deposits
Final review and approvals	Reviewer	Mid to late January	Run a control sheet per entity
Transmit to SSA	Payroll	By due date	Keep the receipt and status logs
Furnish employee copies	HR	By January 31	Track mailing or electronic consent

Citations for SSA processes and e‑file rules.

Deadlines, Extensions, And What To Do If You Are Late

Your Core Dates

• Furnish W‑2VI to employees by January 31. The Virgin Islands BIR also reminds employers of this date each season.
• File Copy A with the SSA by the IRS published due date. For the 2025 wage year, that date is Monday, February 2, 2026.

About Form 8809 Extensions

Extensions of time to file W‑2, including W‑2VI, are not automatic. You may request one 30‑day extension by submitting a complete Form 8809 with a valid reason, signed under penalties of perjury. The IRS grants these only in extraordinary circumstances or catastrophe. This does not extend the employee furnish date.

If your request for more than 30 days is approved at all, you still receive only 30 days in most cases. The Internal Revenue Manual describes the response language and limitations that processing uses when handling these requests.

Practical advice, build your calendar to meet the original due date. Treat an extension as a backup for disasters, not a planning tool.

If You Missed The Deadline

• File as soon as possible, penalties generally scale with how late you are and whether you corrected quickly.
• Furnish employee copies immediately, then transmit to the SSA and document your timeline.
• Keep receipts, emails, and status logs that show your corrective actions.

Furnishing Employee Copies

You can furnish electronically with employee consent, or by mail. Keep proof of delivery, batch logs, and postage receipts. If you use a provider to mail copies, pull the vendor proof files into your workpapers. The furnish date does not move just because you scheduled SSA transmission for the same day, they are separate obligations.

Workflow, Controls, And Where Accountably Fits

You do not need heroics to get W‑2VI out on time. You need a repeatable workflow and a team that sticks to it.

Your Pre‑Close Checklist

• Confirm which employees performed services in the USVI, reconcile day counts.
• Map each employee to W‑2 or W‑2VI, never both for the same dollars.
• Validate names, SSNs, addresses, and company EINs. Use SSA verification where available.
• Reconcile gross wages and VI withholding to payroll tax deposits.
• For nonresidents with VI‑source wages, note that they will attach Form 8689 to the U.S. return.

Common Review Findings

• Missing or incorrect residency notes for §937 tests. Keep a one‑page summary.
• Box 2 totals that do not match Virgin Islands deposits.
• Mixed U.S. and USVI wages on one form.
• Late e‑filing because the e‑file threshold rule was missed.

Where Accountably Helps

During peak season, firms often have enough sales, they struggle with delivery. If your team is buried in production, Accountably can slot trained offshore talent into your existing systems, with SOPs, structured workpapers, and layered reviews that protect partner time. That matters when you are pushing hundreds of W‑2 and W‑2VI records through approvals and need predictable turnaround without rework. Keep ownership of your workflow, add disciplined capacity only where you need it.

We keep this section brief on purpose. The article exists to help you file correctly. If you want help with delivery during the January crunch, you know where to find us.

Pricing And Service Options, If You Use A Provider

Many providers publish a base payer fee plus per‑form pricing, with optional services for USPS mailing, TIN matching, and state or territory filing when required. Scheduling transmissions, pre‑transmit edit windows, and batch uploads are common features that reduce manual touchpoints and help you keep a clean audit trail. Always confirm current season pricing and terms before you submit.

Tip, run a volume model first, then lock your cart. It is easier to control spend before the transmit button is live.

FAQs

Do I need a W‑2 or a W‑2VI for a remote employee who worked part of the year in the USVI

Use W‑2VI for the Virgin Islands workdays and a regular W‑2 for U.S. workdays, based on where services were performed. If the employee is not a bona fide USVI resident, they will typically attach Form 8689 to allocate U.S. tax to the USVI.

What is the due date to file 2025 W‑2VI with the SSA

The due date is Monday, February 2, 2026. The usual January 31 date moves because it falls on a weekend. Furnish employee copies by January 31.

Do I have to e‑file W‑2VI

Yes if you file 10 or more information returns in total, including W‑2s and other forms, unless you have a waiver or exemption. The SSA encourages all employers to e‑file.

Can I get more time with Form 8809

You can request one 30‑day extension to file with SSA, but it is not automatic and the IRS grants it only for qualifying reasons. This does not extend the employee furnish deadline.

How fast will I get an SSA acknowledgement

If you file through BSO, you receive a receipt and quick edit feedback after upload. Providers often mirror or add to that status tracking. Keep the receipt and any subsequent SSA status updates in your workpapers.

Where do residency and sourcing rules live

Residency and sourcing rules come from IRC §937 and Publication 570. Check presence, tax home, and closer connection, then source wages to the location where services were performed.

Compliance Notes And Sources

• IRS, General Instructions for Forms W‑2 and W‑3, 2025, due dates, e‑file threshold, and filing rules.
• IRS, About Form W‑2VI.
• IRS, Publication 570 and Individuals in U.S. Territories page, residency and sourcing.
• IRS, About Form 8689 and IRM 21.8.1, allocation mechanics.
• SSA, Employer W‑2 Filing instructions and BSO features.
• USVI BIR, furnish reminders to employees.

This article is for general guidance, not legal or tax advice. Always confirm current year instructions before filing.

Closing

You have the rules, you have the dates, and you have a workflow you can trust. Tie the form to the work location, apply residency correctly, and watch your credits for duplicates. File on time, keep your receipts, and sleep well on January 31. If your team needs extra hands without losing control, Accountably can help you scale delivery with structure, not shortcuts.