U.S. Citizens Living in Canada: What You File Each Year
The U.S. return, the credits, the account reports, the forms Canadian accounts trigger, and the deadlines
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A U.S. citizen living in Canada files a U.S. return every year on worldwide income, because the United States taxes citizens wherever they live. The foreign tax credit usually eliminates U.S. tax on Canadian income, but the filings remain: the return, the FBAR, often Form 8938, and forms triggered by Canadian funds and companies.
On this page
The annual list
| Filing | When it applies | Deadline |
|---|---|---|
| Form 1040 | Gross income above the filing threshold | June 15 (automatic two-month extension for those living abroad — interest on unpaid tax still runs from April 15), extendable to October 15 with Form 4868 |
| Form 1116 | Claiming credit for Canadian tax | With the return |
| FBAR | Foreign accounts above US$10,000 aggregate | April 15, automatic extension to October 15 |
| Form 8938 | Foreign assets above US$200,000 single / US$400,000 joint on the last day of the year, or US$300,000 / US$600,000 at any time (abroad thresholds) | With the return |
| Form 8621 | Canadian mutual funds or ETFs outside registered plans | With the return |
| Form 5471 | 10 percent or more of a Canadian corporation | With the return |
| Form 3520 | Canadian trust distributions, large foreign gifts | With the return |
| Canadian T1 | Canadian resident | April 30 (June 15 if self-employed) |
Things that trip people up
TFSAs (not recognized by the U.S. — income taxable, possible trust reporting — the TFSA vs Roth guide), Canadian mutual funds (PFICs — the PFIC guide), RESPs (the U.S. doesn't recognize the plan's tax deferral, so plan income — and, on the common treatment, the Canada Education Savings Grant — is taxable to a U.S.-citizen subscriber; the IRS has issued no RESP-specific guidance), the principal residence sale (the U.S. §121 exclusion is US$250,000 single / US$500,000 joint and isn't indexed, while Canada's principal residence exemption can shelter the whole gain — so gain above the U.S. exclusion can be U.S.-taxable with no Canadian tax to credit), and the Canadian corporation (a CFC — the Form 5471 guide).
Frequently asked questions
Do U.S. citizens in Canada have to file U.S. taxes?
Yes — on worldwide income, every year, if income exceeds the filing threshold.
Will I owe U.S. tax?
Often not — the foreign tax credit for Canadian tax usually covers it, but PFICs, TFSAs, and home sales can create U.S. tax.
When is the U.S. return due for someone living in Canada?
June 15 automatically (attach a statement; interest on any unpaid tax runs from April 15), with an extension to October 15 available on Form 4868.
What if I've never filed?
The streamlined foreign offshore procedures usually allow catching up on three years of returns and six of FBARs without penalties.
Official sources
The IRS explains: “File Form 1116 to claim the foreign tax credit if you are an individual, estate, or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession.” — Internal Revenue Service, About Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), https://www.irs.gov/forms-pubs/about-form-1116
FinCEN explains: “A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.” — Financial Crimes Enforcement Network, Report Foreign Bank and Financial Accounts, https://www.fincen.gov/report-foreign-bank-and-financial-accounts
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle annual U.S. returns, FBARs, and international information returns for U.S. citizens living in Canada. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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