On March 30, 2026, the Virgin Islands Labor Commissioner, Gary Molloy, announced that the VI UI trust fund had a positive balance of $4 million as of March 20th. See the link at:
This is good news for employers in the Virgin Islands after years of increasing FUTA taxes.
This positive balance in the trust fund is the result of many years of FUTA offset credit reductions that increased employer FUTA taxes and changes in the state UI rates to pay down the outstanding debt that grew with the Great Recession of 2008 and the COVID Recession pay outs.
If the positive balance is maintained through November 10, 2026, the net FUTA tax for 2026 for employers in the Virgin Islands will drop dramatically down to 0.6%. A final determination of the FUTA offset credit reduction will not be made for 2026 until after November 10th.
If the VI is able to maintain a positive balance as of January 1, 2027 the full FUTA offset credit reduction and the net FUTA rate of 0.6 should be continued for 2027 and 2028.
We continue to follow UI trust fund solvency, and will update UWC members with the status of state borrowing from the Federal Unemployment Account (FUA) to pay benefits.
