OMB No. 1545-0074
                                     Allocation of Individual Income Tax 
Form 8689                                               to the U.S. Virgin Islands 
Department of the Treasury                                Attach to Form 1040 or 1040-SR.                                2022
                                                                                                                         Attachment   
Internal Revenue Service              Go to www.irs.gov/Form8689 for the latest information.                             Sequence No. 869
Name(s) shown on Form 1040 or 1040-SR (your tax return)                                                             Your social security number 

Part I   Income From the U.S. Virgin Islands (USVI)
1    Wages, salaries, tips, etc.  . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 1
2    Taxable interest .     . . . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 2
3    Ordinary dividends .     . . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 3 
4    Taxable refunds, credits, or offsets of local USVI income taxes  .   . .     .       .          . .  . . . . . . 4
5    Alimony received  .      . . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 5
6    Business income or (loss)    . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 6
7    Capital gain or (loss)  .  . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 7 
8    Other gains or (losses)    . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 8
9    IRA distributions (taxable amount) . .             . . . . . . . . . . .     .       .          . .  . . . . . . 9
10   Pensions and annuities (taxable amount)              . . . . . . . . . .     .       .          . .  . . . . . . 10
11   Rental real estate, royalties, partnerships, S corporations, trusts, etc.  . .       .          . .  . . . . . . 11
12   Farm income or (loss)  .   . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 12 
13   Unemployment compensation  .     .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 13
14   Social security benefits (taxable amount)            . . . . . . . . . .     .       .          . .  . . . . . . 14 
15   Other income. List type and amount                                                                               15
16   Add lines 1 through 15. This is your total USVI income         . . . . .     .       .          . .  . . . . . . 16
Part II  Adjusted Gross Income From the USVI
17   Educator expenses        . . . . .   .             . . . . . . . . . . .     .       .            17 
18   Certain business expenses of reservists, performing artists, and fee-basis government officials   18
19   Health savings account deduction     .             . . . . . . . . . . .     .       .            19
20   Moving expenses for members of the armed forces  .           . . . . . .     .       .            20
21   Deductible part of self-employment tax  .            . . . . . . . . . .     .       .            21
22   Self-employed SEP, SIMPLE, and qualified plans .           . . . . . . .     .       .            22
23   Self-employed health insurance deduction  .            . . . . . . . . .     .       .            23
24   Penalty on early withdrawal of savings  .            . . . . . . . . . .     .       .            24 
25   IRA deduction  .       . . . . . .   .             . . . . . . . . . . .     .       .            25
26   Student loan interest deduction  .   .             . . . . . . . . . . .     .       .            26
27   Reserved for future use    . . . .   .             . . . . . . . . . . .     .       .            27
28   Reserved for future use    . . . .   .             . . . . . . . . . . .     .       .            28
29   Add lines 17 through 28  .   . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 29
30   Subtract line 29 from line 16. This is your USVI adjusted gross income       .       .          . .  . . . . . . 30
Part III Allocation of Tax to the USVI
31   Enter the amount from the total tax line on your tax return      . . . .     .       .          . .  . . . . . . 31
32   Enter total of certain amounts from your tax return. See instructions on page 4 for amount to enter .        . . 32
33   Subtract line 32 from line 31  . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 33
34   Enter the amount from the adjusted gross income line on your tax return              .            34
35   Divide line 30 above by line 34. Enter the result as a decimal (rounded to at least 3 places). Do not 
     enter more than 1.000      . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 35 .
36   Multiply line 33 by line 35. This is your tax allocated to the USVI  . .     .       .          . .  . . . . . . 36
Part IV  Payments of Income Tax to the USVI
37   Income tax withheld by the USVI  .   .             . . . . . . . . . . .     .       .            37
38   2022 estimated tax payments and amount applied from 2021 return        .     .       .            38
39   Amount paid with Form 4868 (extension request) .           . . . . . . .     .       .            39
40   Add lines 37 through 39. These are your total payments to the USVI     .     .       .          . .  . . . . . . 40
41   Enter the smaller of line 36 or line 40. Add this amount to the total payments line of your tax return. 
     On the dotted line next to it, enter “Form 8689” and show this amount .      .       .          . .  . . . . . . 41
42   Overpayment to the USVI. If line 40 is more than line 36, subtract line 36 from line 40                . . . . . 42
43   Amount of line 42 you want refunded to you             . . . . . . . . .     .       .          . .  . . . . . . 43
44   Amount of line 42 you want applied to your 2023 estimated tax        . .     .       .            44
45   Amount you owe to the USVI. If line 40 is less than line 36, subtract line 40 from line 36 .             . . . . 45
46   Enter the amount from line 45 that you will pay when you file your income tax return. Add this amount 
     to the total payments line of your tax return. On the dotted line next to it, enter “Form 8689” and 
     show this amount  .      . . . . .   .             . . . . . . . . . . .     .       .          . .  . . . . . . 46
For Paperwork Reduction Act Notice, see your tax return instructions.                       Cat. No. 64603D              Form 8689 (2022)

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Form 8689 (2022)                                                                                                   Page 3 

Section references are to the Internal Revenue Code         Part I—Income From the U.S. Virgin Islands 
unless otherwise noted.                                     (USVI)
Future Developments                                         Source of income. The rules for determining the source 
For the latest information about developments related to    of income are explained in sections 861 through 865 and 
Form 8689 and its instructions, such as legislation         937, Regulations section 1.937-2, and chapter 2 of Pub. 
enacted after they were published, go to                    570. Some general rules are: 
www.irs.gov/Form8689.                                       • The source of wages, salaries, or tips is generally where 
                                                            the services are performed. If you worked both in and 
Instructions                                                outside the USVI, include on line 1 only wages, salaries, 
Purpose of form. Use Form 8689 to figure the amount of      or tips earned while you were in the USVI. However, 
U.S. tax allocable to the U.S. Virgin Islands (USVI).       certain income earned while temporarily performing  
Who must file. If you were a U.S. citizen or resident alien services in the USVI will not be considered USVI source 
(other than a bona fide resident of the USVI) and had       income. For details, see De minimis exception, later .
income from sources in the USVI or income effectively       Active duty U.S. Armed Forces. If you are a bona fide 
connected with the conduct of a trade or business in the    resident of the USVI and are stationed outside of the 
USVI, you may owe tax to the USVI. Your USVI tax            USVI, your military compensation will be sourced in the 
liability is a percentage of your U.S. tax liability.       USVI under the Servicemembers Civil Relief Act (SCRA). If 
         Do not use this form if you were a bona fide       you are not a bona fide resident of the USVI but are 
         resident of the USVI during the entire tax year,   stationed in the USVI, however, your military 
▲!       or were considered a bona fide resident of the     compensation will not be sourced there. For further 
CAUTION                                                     details, see Pub. 570. 
         USVI for the entire tax year under the special  
rules for the year of a move (see chapter 1 of Pub. 570,    Military spouses. If you are the civilian spouse of a 
Tax Guide for Individuals With Income From U.S.             member of the U.S. Armed Forces, work in the USVI, and 
Possessions).                                               retain a residence or domicile in one of the 50 states, the 
Joint returns. If you file jointly and only one spouse is   District of Columbia, or another U.S. territory, under the 
a bona fide resident of the USVI for the entire tax year,   Military Spouses Residency Relief Act (MSRRA) your 
the resident status for both spouses and subsequent tax     wages, salaries, tips, and self-employment income will 
treatment is determined by the spouse with the higher       not be considered income from the USVI. Under MSRRA, 
adjusted gross income (AGI) (disregarding community         the military spouse must be in the USVI solely to be with 
property laws). File Form 8689 only if the spouse with the  his/her servicemember spouse who is serving in 
higher AGI is not a bona fide resident of the USVI for the  compliance with military orders. For details on MSRRA, 
entire tax year.                                            see Pub. 570. 
Where to file. You must file identical tax returns with the • The source of interest income is generally where the 
United States and the USVI. If you are not enclosing a      payer is located. For example, interest from a certificate 
check or money order, file your original tax return         of deposit issued by a USVI bank or a USVI branch of a 
(including Form 8689) with the Department of the            U.S. bank is USVI source income. 
Treasury, Internal Revenue Service, Austin, TX              • Generally, dividends are sourced where the paying 
73301-0215 USA.                                             corporation is created or organized. 
If you are including a check or money order, file your      • Taxable refunds, credits, or offsets of local USVI income 
original return with the Internal Revenue Service, P.O. Box taxes include only nonmirror code income taxes.
1303, Charlotte, NC 28201-1303 USA.                         • Alimony received from a person who is a bona fide 
File a signed copy of your tax return (with all             resident of the USVI is USVI source income. 
attachments, forms, and schedules, including Form 8689)     • Except as provided in regulations, income that is from 
with the Virgin Islands Bureau of Internal Revenue, 6115    sources within the United States or effectively connected 
Estate Smith Bay, Suite 225, St. Thomas, VI 00802. They     with the conduct of a trade or business in the United 
will accept a signed copy of your U.S. return and process   States is not income from the USVI. 
it as an original return.                                   • The source of gains, profits, or income from the sale or 
Amended returns. You can file Form 1040-X                   disposition of real property (and any interest in real 
electronically with tax filing software to amend 2019 or    property) is generally where the real property is located. 
later Forms 1040 or 1040-SR. To do so, you must have        Personal property. The source of income from the sale 
e-filed your original 2019 (or later) tax return. Go to     of nondepreciable personal property is generally the 
www.irs.gov/Filing/Amended-Return-Frequently-Asked-         seller’s residence. For example, if you are a bona fide 
Questions for more information. Or, you can send your       resident of the USVI, gain from the sale or disposition of 
paper Form 1040-X to the IRS at the address in the          personal property is generally from sources within the 
Instructions for Form 1040-X.  Send your Form 1040-X to     USVI. Income from the sale of inventory is generally 
the USVI at the address for the Virgin Islands Bureau of    sourced where the title to the property passes. See 
Internal Revenue under Where to file  , earlier.            section 865 for details. 
Additional information. Pub. 570 has more information 
and an example of how to complete Form 8689. To get 
Pub. 570, see How To Get Tax Help in the Instructions for 
Form 1040. 

Form 8689 (2022)                                                                                                     Page 4 

De minimis exception. This is an exception to the                Schedule 2 (Form 1040).
general rule for determining the source of income earned      • Self-employment tax;
in the USVI. Generally, income from the USVI does not         • Social security and Medicare tax on unreported tip 
include compensation for services performed in the USVI       income;
if during 2022 you:
                                                              • Uncollected social security and Medicare tax on wages;
• Were a U.S. citizen or resident;
                                                              • Household employment tax;
• Were not a bona fide resident of the USVI;
                                                              • Uncollected social security and Medicare or RRTA tax 
• Were not employed by or under contract with an              on tips or group-term life insurance from Form W-2, box 
individual, partnership, or corporation that is engaged in a  12;
trade or business in the USVI;
                                                              • Tax on excess golden parachute payments;
• Temporarily performed services in the USVI for 90 days 
                                                              • Excise tax on insider stock compensation from an 
or less; and
                                                              expatriated corporation; and
• Earned $3,000 or less from such services.
                                                              • Additional tax on excess contributions or accumulation 
Part II—Adjusted Gross Income From the                        from Form 5329.
USVI                                                             Schedule 3 (Form 1040).
Lines 21 through 23. If you had USVI source self-             • Health coverage tax credit from Form 8885;
employment income, figure the amount to enter on each         • Credit for repayment of amounts included in income 
line by (1) dividing your USVI source self-employment         from earlier years; 
income by your total (worldwide) self-employment              • Net section 965 liability remaining to be paid in future 
income, and (2) multiplying the total amount of each          years; and
deduction that applies to you by the result in (1). 
                                                              • Other payments or refundable credits reported on line 
Line 24. Enter the amount of penalty on early withdrawals     13z.
from savings accounts in USVI banks or USVI branches 
of U.S. banks. The Form 1099-INT or Form 1099-OID you         Part IV—Payments of Income Tax to the USVI
received will show the amount of any penalty you were         Amounts overpaid to the United States will generally not 
charged.                                                      be applied to the amount you owe to the USVI. Similarly, 
Line 25. Enter the total of your and your spouse’s IRA        amounts overpaid to the USVI will not be applied to the 
deductions attributable to USVI compensation or earned        amount you owe to the United States. 
income. Figure the amount to report on line 25 by (1)         Line 46. Enter the amount you owe to the USVI that you 
dividing your USVI compensation or earned income by           will pay when you file your income tax return.
your total (worldwide) compensation or earned income,         Credit for U.S. tax paid to the USVI. You can take a 
and (2) multiplying the amount of your IRA deduction by       credit on your U.S. return for the U.S. tax allocated to the 
the result in (1). Figure the amount of your spouse’s IRA     USVI only if you actually paid the tax to the USVI. To take 
deduction the same way.                                       the credit, you must complete Form 8689 and attach it to 
Line 29. Include in the total on line 29 the amount of any    your Form 1040 or 1040-SR. Add line 41 and line 46 of 
other deductions included on the Archer MSA deduction         Form 8689 and include the amount in the total on Form 
line and the Total other adjustments line of Schedule 1       1040 or 1040-SR, Total payments line. On the dotted line 
(Form 1040) that are attributable to your USVI income. On     next to it, enter “Form 8689” and the amount paid. 
the dotted line next to line 29, enter the name and amount 
of each deduction attributable to your USVI income. On        Penalty for Failure To Furnish Information 
line 29, enter the total amount of deductions attributable    If you became or ceased to be a bona fide resident of a 
to your USVI income. If you or your spouse had an Archer      U.S. possession, you may be required to file Form 8898, 
MSA deduction on Schedule 1 (Form 1040), figure the           Statement for Individuals Who Begin or End Bona Fide 
amount to report on line 29 the same way you would an         Residence in a U.S. Possession. If you fail to provide the 
IRA deduction (see Line 25 above).                            required information, you may have to pay a $1,000 
Line 30. This amount is your adjusted gross income.           penalty for each failure unless you can show the failure 
                                                              was due to reasonable cause and not willful neglect. This 
Line 32. Enter the total of the amounts from:                 penalty is in addition to any criminal penalty provided by 
Form 1040.                                                    law. For details, see the Instructions for Form 8898.  
• Earned income credit (EIC);
• Refundable child tax credit or additional child tax credit; 
and 
• American opportunity credit.