Who this is for
- Corporations formed and resident in Canada that hold or plan to open an account at a bank branch in the US for customer receipts and ACH payments
Not covered here
- Bank-specific account eligibility and document requirements
- Detailed US return filing tests
- Preparing Forms T1135 and W-8BEN-E
- US state tax and registration rules
What does the account trigger?
A US account does not, by itself, create a US corporation or a US income-tax return. Its location matters more to Canada's foreign-property rules than to US income-tax filing. Check each obligation separately:
| Question | Starting answer | What changes it |
|---|---|---|
| US corporate return | No return merely for holding the account | US business activities or certain US-source income |
| Canadian Form T1135 | Possible if the cost of all reportable foreign property exceeds C$100,000 | Cash used exclusively in an active business is excluded |
| US FBAR | No FBAR for the US account | A US person has accounts located outside the US |
| Bank tax document | Often Form W-8BEN-E | The right form depends on the corporation's US tax status and the payment |
Can a Canadian corporation open a US account without a US company?
Yes, a Canadian corporation can apply in its own name without first forming a US company. The IRS expressly contemplates a foreign corporation with no US office using a US bank account. Whether a bank accepts the application, and whether the account supports ACH, depends on that bank's account and identity-verification rules (IRS: Form 1120-F instructions).
For the bank's identity and address checks, see US business address and bank account.
Does opening the account mean filing a US tax return?
No. A Canadian corporation does not file Form 1120-F merely because it opens a US account or receives ACH payments there. The IRS bases filing on the corporation's activities and income, including a US trade or business and some US-source income for which withholding was insufficient (IRS: foreign corporation filing responsibilities).
US work, US agents or certain US-source income can change the answer, even if a treaty exempts some income. See when a Canadian corporation files a US return for the full test.
What tax form might the US bank ask for?
A US bank may ask the Canadian corporation for Form W-8BEN-E to document its foreign entity status. The form can also establish the entity's status for US withholding purposes; giving it to the bank is not the same as filing a US income-tax return (IRS: W-8BEN-E instructions).
The appropriate certificate depends on the corporation's status and the income involved. See W forms for a Canadian corporation before completing it.
Does the US-dollar account count toward Form T1135?
Funds held at a bank branch outside Canada are generally foreign property for a Canadian-resident corporation. A US-dollar account held in Canada is not foreign property merely because of its currency. Form T1135 becomes relevant when the combined cost amount of all its specified foreign property exceeds C$100,000 in Canadian dollars at any time in its tax year, unless an exclusion applies (Income Tax Act, section 233.3; CRA: T1135 questions).
Cost is the test, not the account's year-end balance or a market-value estimate. Add other specified foreign property owned by the corporation at the same time. The CRA's example combines a US bank deposit with foreign shares, and says a temporary crossing of the threshold still triggers reporting. Record the dates and Canadian-dollar cost of deposits and withdrawals; do not infer the result from a single US-dollar peak (CRA: T1135 questions).
If the account earns interest, the corporation reports it on its Canadian tax return even if no T1135 is due (CRA: T1135 questions).
Its owner does not include that account on a personal T1135 merely because they own the shares. For filing details, see foreign property and affiliate reporting.
If T1135 is required, the corporation files it by its T2 deadline, six months after tax year-end (CRA: T1135 questions; CRA: T2 filing deadline).
A Quebec-resident corporation that meets the foreign-property test also files Form TP-1079.8.BE-V by its Quebec return deadline. This applies to tax years ending after December 30, 2025 (Revenu Quebec: foreign-property reporting).
Is working cash excluded as active-business property?
Cash held exclusively in the course of carrying on the corporation's active business is excluded from specified foreign property. The statute states the exclusive-use rule, and the CRA applies it to a warehouse used only for business inventory; neither source gives a blanket answer for surplus cash in a US bank account (Income Tax Act, section 233.3; CRA: T1135 questions).
Cash moving through the account to pay suppliers or operating costs has a stronger business-use case than money left there as an investment reserve. The boundary for surplus cash is fact-dependent and not clearly resolved by the CRA's published examples. Keep bank statements and a cash-use record. If non-excluded property could cross the threshold and exclusive use cannot be supported, filing T1135 is the cautious course; have a CPA review the classification.
Is an FBAR required, and by whom?
No FBAR reports an account at a bank located in the US. FBAR covers foreign financial accounts of US persons; a corporation formed and resident in Canada does not become a US person just by banking or selling in the US (FinCEN: FBAR; IRS: FBAR).
A US person, such as a US citizen or resident, may personally need an FBAR for the corporation's Canadian or other non-US accounts if they can sign on them or directly or indirectly own more than 50% of the corporation's share value or voting power. Count all foreign accounts in which that person has a financial interest or signature authority toward US$10,000 at any time in the calendar year. The US account does not count. See foreign account reporting for the full test (IRS: FBAR financial interest; FinCEN: FBAR).
If required, that person's FBAR is due April 15, with an automatic extension to October 15 (IRS: FBAR).
How do you handle the US dollars at year-end?
If the books use Canadian dollars, translate the remaining US-dollar bank balance at year-end. For Canadian-dollar tax reporting, record receipts and payments at the transaction-date rate or a CRA-accepted alternative. An eligible corporation can elect different tax conversion rules by filing Form T1296 by 60 days after the first day of the tax year (CRA: income tax reporting currency).
Later spending or conversion can create an exchange gain or loss. A year-end book adjustment alone does not settle its tax treatment, which depends on how the funds were used (CRA: audit manual, foreign currency exchange; Income Tax Act, section 39). For the entries, see US-dollar sales and marketplace payouts.
Example
Illustrative amounts only; each corporation has no other specified foreign property unless stated.
Customer receipts stay below the threshold
A Canadian corporation's US account holds at most US$60,000 of customer receipts. Assume the highest combined Canadian-dollar cost of its non-excluded foreign property is C$82,000. The account alone creates no US return or FBAR requirement, and the corporation is below the T1135 threshold even without claiming the active-business exclusion.
A larger balance sits in the account
A corporation's account peaks at US$120,000, with deposits costing about C$165,000. It must test T1135. Money committed to near-term operating payments may support exclusive active-business use; idle cash may not. The corporation should keep the cash-flow records and review whether to file, even if the year-end balance later falls.
The owner is a US citizen
A US-citizen owner can sign on the corporation's US and Canadian accounts. The US account is not an FBAR account. The Canadian account may create a personal FBAR obligation if the combined value of accounts the owner can sign on or has a financial interest in crosses the US threshold. Majority ownership can create that interest even without signing authority; the Canadian corporation itself does not file solely because of the owner.
Different for you?
- Your corporation has US staff, premises or other US-source income: review Canadian corporation US tax returns and gather contracts, work locations and income records.
- Your foreign assets or idle cash cross the Canadian threshold: use foreign property and affiliate reporting and gather deposit dates, Canadian-dollar costs and cash-use records.
- A US citizen can sign on non-US accounts: check that person's foreign account reporting.
- The bank asks for tax certification or account documents: use W forms for a Canadian corporation and US business address and bank account.
- The account's use or exchange-gain treatment is mixed: take the statements, contracts and ledger to cross-border tax for review.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Form T1135 reporting threshold Total cost amount of all specified foreign property at any time in the year, in Canadian dollars; filing is required when the total is more than this | C$100,000 | Income Tax Act, s. 233.3(1) and (3) Checked |
| Canadian corporation income tax return filing period After the corporation's taxation year end under paragraph 150(1)(a) | six months | Income Tax Act, paragraph 150(1)(a) Checked |
| Quebec foreign-property return start date Form TP-1079.8.BE-V applies to tax years ending after this date | December 30, 2025 | Revenu Quebec: Requirement to report foreign property held outside Canada Checked |
| FBAR ownership level for an entity's accounts You have a financial interest in the foreign accounts of a corporation, partnership or other entity you own more than this share of, directly or indirectly | 50% | eCFR: 31 CFR 1010.350, Reports of foreign financial accounts Checked |
| FBAR filing threshold Total maximum value of all foreign financial accounts at any time in the calendar year; an FBAR is required when the total is more than this | US$10,000 | FinCEN: Report Foreign Bank and Financial Accounts Checked |
| FBAR filing deadline Following the calendar year reported; an automatic extension applies | April 15 | IRS: Report of Foreign Bank and Financial Accounts Checked |
| Automatic FBAR extension deadline Following the calendar year reported; no extension request is required | October 15 | IRS: Report of Foreign Bank and Financial Accounts Checked |
| Functional currency election filing deadline Form T1296; available only to corporations that meet Income Tax Act subsection 261(3) | 60 days after the first day of the tax year | Income Tax Act, paragraph 261(3)(b) Checked |
Primary sources
- Income Tax Act, section 233.3
- CRA: Questions and answers about Form T1135
- CRA: When to file your corporation income tax return
- Revenu Quebec: Foreign property reporting
- IRS: Foreign corporation Form 1120-F filing responsibilities
- IRS: Instructions for Form 1120-F
- IRS: Instructions for Form W-8BEN-E
- FinCEN: Report of Foreign Bank and Financial Accounts
- IRS: Report of Foreign Bank and Financial Accounts
- CRA: Income Tax Folio S5-F4-C1, Income Tax Reporting Currency
- CRA: Income Tax Audit Manual, Chapter 27
- Income Tax Act, section 39
About this guide
Edited and reviewed by Di Lu, CPA on . It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.