What is Form 8840 and when should a snowbird file it?

Form 8840 is a statement about where your life is, not a tax return

The form makes three claims to the IRS for one calendar year: that you were present in the US for fewer than 183 days, that your tax home — the place of your main work or, for a retiree, your regular home — was in Canada for the whole year, and that your connections to Canada are closer than your connections to the US. If the IRS accepts those claims, the substantial presence test is set aside and you are taxed as a non-resident, meaning only on US-source income, with no worldwide reporting and no FBAR.

The questions on the form are the evidence for the third claim. It asks for your US day counts for the current year and the two before it, your visa status, and then the location of your permanent home, your family, your cars and personal belongings, your bank and investment accounts, your driver's licence and voter registration, and the country where you filed income tax returns. A Canadian snowbird with a house in Brampton, an Ontario licence, Canadian accounts and a T1 filed every spring answers every one of those in Canada's favour.

Tax home deserves a moment, because the phrase trips up retirees. For someone still working it is the location of the main place of business; for someone who has stopped working it is simply the place where they regularly live. A retired couple whose only home is in Ontario and who rent in Arizona for the winter have an Ontario tax home even if they spent more nights in Arizona that year. The form also lets you show a closer connection to two foreign countries rather than one, which occasionally matters for people who split retirement between Canada and a third country.

You file it in every year the weighted day count reaches 183

The trigger is the substantial presence test: all of this year's US days, plus one-third of last year's, plus one-sixth of the year before, reaching 183 or more. A repeated winter of four months or longer meets that test almost every year, so most snowbirds are annual filers. Someone under the test in a given year has nothing to except themselves from and does not file. Our answer on how many days a Canadian can spend in the US shows the arithmetic, and our snowbird tax rules guide works a full five-month example.

Recount every year rather than assuming the result. A light year followed by two heavy ones can pass the test unexpectedly, and a heavy year followed by two light ones can fall below it, which changes nothing about the form itself but does change whether it is due.

The deadline is June 15, the form is per person, and the IRS does not send a receipt

A snowbird with no US wages files Form 8840 by June 15 of the year after the one it covers. If you have no US return to file, the form goes on its own to the IRS service centre in Austin, Texas. If you do file a 1040-NR — because the winter home was rented out, or a US property was sold — the form is attached to that return and travels with it. Each spouse who meets the test files a separate form under their own name, even when every address on the two forms is identical.

The IRS does not acknowledge a Form 8840, so your proof is the copy you keep and the record of when it was mailed. Missing the deadline is costly: a late filer can lose the closer connection exception for that year unless they can show, by clear and convincing evidence, that they took reasonable steps to learn about the requirement and significant steps to comply. Losing the exception means being treated as a US resident for the year, taxable on worldwide income and expected to report Canadian accounts.

Remember that the form covers a calendar year, not a winter. A stay from November to April is split across two tax years, and the days in each year go on that year's form, so a five-month season typically produces two consecutive filings that each report part of it.

When Form 8840 will not work and what takes its place

Two situations close the exception. The first is being physically present in the US for 183 days or more in the single calendar year in question, regardless of how light the prior years were. The second is holding a green card or having taken steps to obtain one, such as filing an application or having a family petition pending. In either case the only route to non-resident treatment is the residency tie-breaker in Article IV of the Canada-US tax treaty, claimed on a 1040-NR with Form 8833 attached; we set out those tests in how the treaty tie-breaker works.

Three limits apply even when the form does work. It does not excuse a 1040-NR or a state return for US-source income, so rent from the Arizona condo still gets reported. It does not change your Canadian status, so the T1 is filed as usual on worldwide income. And it says nothing about the property itself: FIRPTA on a sale and US estate tax on death are separate questions, covered in our snowbird US property tax guide and in how a US vacation home is taxed for Canadians.

State residency rules are separate again. A few states apply their own day-count or domicile tests to decide who owes state income tax, and a federal Form 8840 has no effect on them, so a long stay in one state is worth checking against that state's rules as well.

How we handle Form 8840 for snowbird clients

We keep a running travel log for each client, project the coming season's count before departure, and prepare a Form 8840 for each spouse in the spring for every year the test is met, mailed with tracking and a copy retained on file. Where a client also has US rental income or a sale, the form goes in with the 1040-NR we prepare alongside the Canadian return, so both countries see the same days and the same story. The pre-season items are gathered in our snowbird checklist, and the filing is part of our fixed-fee cross-border tax services.

Source: IRS — About Form 8840 and IRS — Closer Connection Exception to the Substantial Presence Test.