FBAR + Form 8938: US Citizens in Canada Reporting Guide

US citizens living in Canada face a second layer of US tax and reporting obligations that Canadian residents without US ties never encounter. Two of the most commonly misunderstood requirements are the Foreign Bank Account Report (FBAR) and Form 8938 under FATCA. Both are information-reporting obligations — not tax payments — but the penalties for non-compliance are severe.

FBAR triggers and threshold

FBAR stands for Foreign Bank Account Report. It is filed with the Financial Crimes Enforcement Network (FinCEN), not the IRS. The official form is FinCEN 114, filed electronically through the BSA E-Filing System.

You must file FBAR if, at any point during the calendar year, the aggregate value of all your foreign financial accounts exceeded $10,000 (US dollars). The $10,000 threshold is aggregate across all foreign accounts, not per account. If you have five Canadian accounts each holding $3,000 CAD, and the combined converted value exceeds $10,000 USD on any single day of the year, FBAR is required for all five.

Deadline. FBAR is due April 15, with an automatic extension to October 15 — no form required, no election required. It is filed separately from the tax return.

Penalty for willful non-filing. The greater of $100,000 or 50% of the account balance at the time of the violation, per violation. Penalty for non-willful non-filing. Up to $10,000 per violation (adjusted for inflation). Criminal penalties may also apply for willful violations.

What counts as a foreign account

The definition is broader than most US citizens realize. Foreign financial accounts include:

Bank accounts. Chequing, savings, and GIC accounts held at Canadian banks — RBC, TD, Scotiabank, BMO, CIBC, credit unions. Includes accounts in joint names.

TFSA. A Tax-Free Savings Account is a foreign financial account for FBAR purposes. Despite its registered status in Canada, the IRS does not recognize the TFSA as a tax-deferred vehicle. TFSA balances count toward the $10,000 threshold and the account must be reported on FBAR.

RRSP and RRIF. These are also foreign financial accounts for FBAR purposes. However, the Canada-US tax treaty (Article XXV) allows US citizens to elect to defer US tax on RRSP/RRIF income until distributions are made — mirroring Canadian tax treatment. The election is made on Form 8891 (note: this form was discontinued; the election is now made via Form 8833 and a statement attached to the 1040). RRSP/RRIF accounts must still appear on FBAR.

RESP. Registered Education Savings Plans are foreign financial accounts. CESG government grants inside the RESP complicate US tax treatment — consult a cross-border specialist.

FHSA. First Home Savings Accounts launched in 2023. The IRS has not issued guidance specifically on FHSA treatment; they are likely reportable as foreign financial accounts.

Investment and brokerage accounts. Non-registered investment accounts at Canadian brokerages, including accounts holding ETFs, mutual funds, and stocks.

Employer pensions. Defined-benefit and defined-contribution plans sponsored by a Canadian employer. Whether the FBAR threshold applies depends on the account having a balance with a determinable value. Defined-benefit plans with an accrued present value may meet this test.

What is generally excluded from FBAR. Accounts held in a US branch of a foreign bank, Canadian accounts of a US corporation where the US citizen is not the beneficial owner, and certain trust-structure accounts depending on the individual’s relationship to the trust.

Form 8938 vs FBAR

Form 8938, Statement of Specified Foreign Financial Assets, is an IRS form attached to your 1040. It is required under FATCA (Foreign Account Tax Compliance Act) and has higher thresholds than FBAR.

Thresholds for US citizens living outside the US (including in Canada):

• $200,000 at year-end, OR
• $300,000 at any point during the year.

For married filing jointly, double these thresholds ($400,000 / $600,000).

For US citizens living in the US with Canadian accounts, the threshold is lower ($50,000 / $75,000 for single filers).

Key differences from FBAR:

• FBAR is filed with FinCEN; Form 8938 is filed with the IRS as part of your 1040.
• FBAR threshold is $10,000 aggregate; Form 8938 threshold is $200,000+ (for overseas filers).
• FBAR covers only financial accounts; Form 8938 covers a broader category of “specified foreign financial assets” including ownership interests in foreign entities.
• Both may need to be filed — they are not substitutes. FBAR covers things Form 8938 does not, and vice versa.

Form 8938 penalty for non-filing. $10,000 per failure, increasing to $50,000 if the IRS sends notice and you still do not file.

Late filing — streamlined compliance procedures

The IRS offers two programs for US citizens who missed FBAR and 8938 filings in prior years:

Streamlined Foreign Offshore Procedures. For US citizens residing outside the US. Requires filing amended returns for 3 years, 6 years of FBARs, payment of any back tax and interest, and a certification that the prior non-compliance was non-willful. No FBAR penalty applies; only a 5% miscellaneous offshore penalty applies to highest aggregate balance (for the foreign-resident version, this is reduced further or eliminated in many cases).

Streamlined Domestic Offshore Procedures. For US citizens who were physically present in the US. Requires the same return/FBAR filings plus a 5% miscellaneous offshore penalty on the highest aggregate account balance across the 6-year period.

Entering either streamlined program protects against the full willful non-filing penalty only if the original failure was genuinely non-willful. Making a false certification is fraud. If prior non-compliance was willful, consult a US tax attorney before filing any voluntary disclosure.

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