FBAR After Moving From Canada: RRSP, TFSA and Bank Accounts

Do I file an FBAR for my Canadian accounts the year I move to the US?

You may. A US resident files an FBAR for a calendar year if the maximum values of all foreign accounts they own or can sign on add up to more than US$10,000 at any time in that year (IRS FBAR page). An RRSP and a TFSA alone can pass that total.

You count as a US resident for the FBAR when you meet a residency test of US tax law: you hold a green card, or you meet the substantial presence test: at least 31 days in the US this year and 183 days over three years, counting all of this year's days, one third of last year's and one sixth of the year before's (Publication 519; 31 CFR 1010.350(b); FinCEN instructions). Past visits can make you resident sooner than you expect. The reverse also exists: if you were in the US fewer than 183 days this year, kept your tax home in Canada and had a closer connection to Canada, you are treated as not meeting the test by filing Form 8840 on time, unless you applied for a green card (Publication 519; 26 USC 7701(b)(3)); you are then not a US resident for the FBAR that year. If you choose to be treated as a resident for part of your arrival year (the first-year choice), the IRS manual counts you as a US resident for the FBAR. A spouse who stays in Canada does not become one just because you file a joint income tax return together. A work-visa holder who meets none of these tests is not a US resident for the FBAR (IRM 4.26.16.2.1.2).

So a green card holder's first FBAR covers the year they first hold the card. A work-visa holder who moves late in the year often has too few days that year; their first FBAR is then for the next year, unless they can make the first-year choice, which needs at least 31 consecutive US days this year, presence on most days from then to December 31, and meeting the substantial presence test next year (26 USC 7701(b)(4); details in your first year as a US tax resident).

A first-year case is not simple when:

• you hold many accounts, or funds inside a TFSA or RRSP;
• you plan to claim to be a Canadian resident under the tax treaty;
• you are a signer on a parent's or employer's account, or own a Canadian corporation;
• you were a US resident in an earlier year and never filed.

What to gather: your green card date or a count of your US days this year and the two before; then for each Canadian account, the name on it, the account number, the institution's name and address, the account type, the names and addresses of any joint owners or of the owner of an account you only sign on, and every statement for the whole calendar year, including months before the move. Keep these records for 5 years (FinCEN instructions).

Do balances from before my move count on my first FBAR?

The rule text gives no part-year exception, so the cautious reading counts the whole calendar year. The regulation requires a report "for each year in which such relationship exists" (31 CFR 1010.350(a)), and the FinCEN instructions measure the threshold and each account's maximum value "during the calendar year" (FinCEN instructions).

The law is not explicit on this point. US tax law does give a first-year mover a residency starting date (Publication 519), and Form 8938 uses it to shorten that form's reporting period. The FBAR uses the income tax residency rules, and the IRS manual lists among them the rule that starts residency partway through the first year. But no official source says whether that partial-year start removes balances from before your move. Reporting each account's highest value for the whole calendar year matches the rule text; reporting only values after the move relies on a reading no official source spells out.

Which Canadian accounts go on the FBAR: RRSP, TFSA, FHSA, RESP?

Every account held at a bank, broker, insurer, trust company or fund in Canada that you own or can sign on goes on the list. The IRS names the RRSP and TFSA as reportable foreign financial accounts (Publication 5569). Canadian tax shelter does not change the FBAR test.

The FBAR uses no family attribution: a parent's account is yours to report only if your name is on it, it is held for you, or you can instruct the bank to move its money. Each family member who becomes a US resident is tested separately, children included; a parent files for a child who cannot. Spouses who both become residents each file, unless every account the second spouse must report is held jointly with the first; then one FBAR can cover both, with Form 114a signed by both (FinCEN instructions). Joint accounts, signer accounts and how to value each are covered in which accounts count on the FBAR.

Accounts I closed before or after moving: are they on my first FBAR?

An account you held as a US resident, even if you later closed it, belongs on that year's FBAR if you file (31 CFR 1010.350(a)). An account closed before you became a US resident, such as in March before a June move, is unsettled: the rule text has no part-year exception, but you were not yet a US resident when you held it, and official sources do not address this case directly. Listing it at its highest value while open matches the rule text. Download statements before closing any account, since the closed account's statements are your record of its value.

How do I add up my accounts and convert Canadian dollars for the FBAR?

Find each account's highest value in Canadian dollars, convert each one at the Treasury rate for December 31 of the reported year, round up to the next whole dollar, then add the accounts together (FinCEN instructions). If the total is over US$10,000, you file and list every account.

1. Take the highest balance on any statement for the year, not the year-end balance, as long as the statements fairly reflect the account's peak; an account holding investments can peak between statements (FinCEN instructions).
2. Use the Treasury Reporting Rates of Exchange for the last day of the year, whatever the date of the peak (Treasury rates).
3. Treasury states the rate as Canadian dollars per US dollar, so divide the Canadian amount by the rate. A US-dollar account at a Canadian bank is still a foreign account; use its highest US-dollar balance with no conversion.
4. Add solely owned, joint and signature-authority accounts together for the threshold test. Money moved from one Canadian account to another during the year is counted only once in that total; each account is still listed at its own maximum (IRM 4.26.16.2.6).

The year-end rate for a calendar year is published after the year closes, so the conversion is done when you file, not when you move.

When and where do I file my first FBAR?

The FBAR is filed online through FinCEN's BSA E-Filing System, separately from your income tax return (FinCEN; IRM 4.26.16.3.1). It is due April 15 after the calendar year, with an automatic extension to October 15; no request is needed (IRS FBAR page).

An extension of your income tax return does not change the FBAR dates. A non-willful failure to file can bring a civil penalty of up to US$16,536 per report (one FBAR), not per account, adjusted yearly for inflation (31 CFR 1010.821; Bittner v. United States). Who files and the threshold in general are in foreign account reporting.

Form 8938 in my first US year: what changes?

Form 8938 has the part-year rule the FBAR lacks. If you are a resident for only part of the year, the Form 8938 reporting period is the part of the year you are a resident, starting on your residency starting date (Form 8938 instructions). Form 8938 is filed with your income tax return, and only if you must file a return. If you choose to file a joint return with your US spouse as a resident, Form 8938 counts you as a specified individual under that choice, even though the FBAR ignores it (Form 8938 instructions).

These thresholds are for a filer who does not live outside the US. A filer whose tax home is in a foreign country and who was in a foreign country at least 330 full days in any 12 consecutive months ending in the tax year uses higher ones: US$200,000 at year end or US$300,000 at any time, or US$400,000 or US$600,000 filing jointly (Form 8938 instructions). A mover who left Canada partway through the year can meet the 330-day count, and the instructions do not say at which date the tax home is tested, so check this before deciding you must file.

Do not mix the two rules. The FBAR and Form 8938 can each be required for the same accounts, with different periods, thresholds and filing systems. A dual-status first year changes which return you file; see your first year as a US tax resident.

I claim Canadian residence under the treaty for part of the year: does the FBAR still apply?

For someone resident under the substantial presence test, the IRS says yes, though the regulation itself does not mention treaties. The FBAR regulation defines a US resident through the residency tests of section 7701(b) (31 CFR 1010.350(b)), and the IRS manual states that tax treaty provisions do not affect residency status for FBAR purposes when one of those tests is met (IRM 4.26.16.2.1.2). A green card holder is different: under the statute, a green card holder who is treated as a Canadian resident under the treaty, keeps the treaty benefits and notifies the IRS stops being treated as a lawful permanent resident from that date (26 USC 7701(b)(6)), so the green card test may no longer be met. No official source says how the FBAR applies then.

The IRS manual guides IRS staff; it is not the regulation itself. Form 8938 is different: a dual resident who files as a nonresident under the treaty, with Form 8833 attached, need not report on Form 8938 for that part of the year (Form 8938 instructions). The treaty position changes Form 8938 but, in the IRS's reading, not the FBAR, and the Form 8938 relief depends on timely filing Form 1040-NR with Form 8833 (Form 8938 instructions).

What else do Canadian accounts start on my US return?

Once you file as a US resident, Schedule B asks whether you had a financial interest in, or signature authority over, a foreign account, and you check "Yes" even if no FBAR is required (Schedule B instructions). Income earned inside the accounts after you become resident is a US tax question. How the IRS treats RRSPs, TFSAs, RESPs and FHSAs is in Canadian registered accounts on a US return. Canadian mutual funds and ETFs fall under the PFIC rules; see PFIC rules when moving to the US. Canadian withholding on the same accounts is in RRSPs and TFSAs after leaving Canada.

Example

Figures are illustrative, in Canadian dollars (C$) and US dollars (US$), using an illustrative year-end rate of 1.40 Canadian dollars per US dollar.

Engineer on a work visa moves on 1 June

She moves to the US on 1 June, works on a work visa and meets the substantial presence test with 214 days in the US that year. Her highest balances in the year: chequing C$8,000, TFSA C$40,000, RRSP C$90,000. Converted, that is about US$5,715, US$28,572 and US$64,286, a total far above the threshold. Following the cautious reading, her first FBAR lists all three accounts at those values, by the April due date or the automatic October extension. She also files Form 8938 with her return only if her accounts' values from 1 June on pass the Form 8938 thresholds that apply to her: the lower ones for someone living in the US, unless she qualifies for the higher ones above.

Green card holder who closed his brokerage account in March

He closes a Canadian brokerage account worth C$30,000 in March, then moves in June on a green card. His RRSP peaked at C$60,000 (about US$42,858 at the illustrative rate), above the threshold on its own, so he files an FBAR. The brokerage account was open during the calendar year, and the rule text gives no part-year exception, so the cautious approach lists it at its highest value while open. He downloads its statements before the account access ends.

Signer on her mother's account

She moves to the US and stays a signer on her mother's Canadian account under a power of attorney that lets her move money. The account is not hers, but she has signature authority over it. She adds its full maximum value to her own accounts for the threshold test and reports it in the signature-authority part of the FBAR.

Different for you?

• Many accounts, funds inside a TFSA or RRSP, or values you cannot reconstruct: see FBAR filing.
• You sign on a parent's, relative's or employer's account: see FBAR filing.
• You own a Canadian corporation: its accounts can go on your FBAR; see FBAR filing and non-resident owners of a Canadian corporation.
• You plan a treaty claim to be a Canadian resident for part of the year: see FBAR filing and your first year as a US tax resident.
• You were a US resident in earlier years and never filed: see FBAR filing and catching up on missed foreign reporting.
• Canadian mutual funds or ETFs: see PFIC rules when moving to the US.
• The whole move, both returns: see moving from Canada to the US.