BorderBird
App →
IRS

Form 8840

Closer Connection Exception Statement for Aliens

Form 8840 — the Closer Connection Exception Statement for Aliens — is the IRS form a Canadian snowbird files to prove they are still a Canadian tax resident even though they met the US Substantial Presence Test (SPT) by spending significant time in the US. Meeting the SPT would otherwise treat you as a US tax resident owing US tax on your worldwide income. Form 8840 establishes that your tax home and closer connection remain in Canada, and it must be filed every year the SPT is met.

⚠️ Important Disclaimer

This content is for informational purposes only and does not constitute legal, tax, accounting, or financial advice. Tax laws change frequently — always verify with the CRA and IRS or consult a qualified cross-border tax accountant before making decisions.

BorderBird is a rental-management and record-keeping tool. It is not an accountant and does not provide accounting, tax, or legal advice.

Filing deadline

By the 1040-NR due date — June 15 for most snowbirds (no US wage withholding), or April 15 if you had US wages subject to withholding

Who must file

Canadians who meet the Substantial Presence Test but have a closer connection to Canada

Official resourceIRS official page →

Key Takeaways

  • Form 8840 (Closer Connection Exception Statement) lets a Canadian who meets the US Substantial Presence Test keep Canadian tax residency and avoid US worldwide-income taxation.
  • The Substantial Presence Test: current-year US days × 1 + prior-year days ÷ 3 + prior-prior-year days ÷ 6. If the weighted sum is ≥ 183 (and you had ≥ 31 US days this year), you meet the SPT.
  • You qualify for the Closer Connection Exception only if you were present in the US fewer than 183 ACTUAL days in the current year, maintained a tax home in Canada, and have closer connections to Canada than to the US.
  • Form 8840 is filed annually by your 1040-NR due date — June 15 for most snowbirds (no US wage withholding), or April 15 if you had US wages subject to withholding. It is mailed to the IRS — there is no e-file option.
  • Skip Form 8840 in a year you met the SPT and you default to US-resident status: worldwide income reporting on Form 1040 plus FBAR and FATCA obligations, with severe penalties.

What is Form 8840?

Form 8840 is the IRS Closer Connection Exception Statement for Aliens. It is the tool a Canadian uses to declare that — despite spending enough time in the US to meet the Substantial Presence Test — their tax home and closer personal and economic connections remain in Canada, so they should not be treated as a US tax resident for the year.

This matters because a US tax resident owes US tax on worldwide income — Canadian rental income, RRSP earnings, dividends, employment income — not just US-source income. For a Canadian snowbird who owns a US rental property and personally occupies it for several months a year, meeting the SPT is easy to do by accident. Form 8840 is what preserves Canadian residency.

The Substantial Presence Test (SPT) — the weighted-day formula

The Substantial Presence Test determines whether a non-citizen, non-green-card-holder counts as a US tax resident. It uses a weighted count of US days over three years:

  • Days in the US during the current year × 1, PLUS
  • Days in the US during the prior year × 1/3, PLUS
  • Days in the US during the prior-prior year × 1/6
  • If the sum is ≥ 183 days, AND you spent at least 31 days in the US during the current year, you meet the SPT.

Worked example — 150 days each of 3 years: 150 + (150 ÷ 3) + (150 ÷ 6) = 150 + 50 + 25 = 225. That is well over 183, so the SPT is triggered and Form 8840 (or a treaty tie-breaker) is needed to avoid US residency.

For contrast — 120 days each of 3 years: 120 + 40 + 20 = 180, just under the threshold — safe with margin. In practice, Canadians spending roughly 121-180 US days a year routinely cross the line and need Form 8840 every year.

Day-counting note: any part of a day physically in the US counts as a full day (arriving at 11pm or leaving at 6am each count as one day). Transit of under 24 hours and days you couldn't leave due to a medical condition are excluded.

Who must file Form 8840?

You must file Form 8840 for any year in which you meet the Substantial Presence Test but want to be treated as a non-resident under the Closer Connection Exception. All three of these must be true:

  • Fewer than 183 ACTUAL days in the US in the current year — note this is the actual day count, not the weighted SPT total. If you spent 183+ actual days in the US this year, the Closer Connection Exception is unavailable and you must fall back to the Canada-US treaty tie-breaker (Form 8833).
  • A tax home in a foreign country — your Canadian primary residence.
  • A closer connection to Canada than to the US— measured by factors such as where your family, permanent home, personal belongings, social and business ties, voter registration, and driver's license are located.

For most Canadian snowbirds spending 121-180 US days a year, Form 8840 is mandatory annual filing. Under about 121 days a year, you don't trigger the SPT and don't need Form 8840 — though you should still file your normal Form 1040-NR if you have US rental income.

Filing deadline

Form 8840 is filed annually, by your Form 1040-NR due date:

  • June 15 for most snowbirds — Canadians with no US wages subject to withholding.
  • April 15 if you had US wages subject to US withholding (rare for snowbirds).

If you are also filing a Form 1040-NR (because you have US rental income), attach Form 8840 to that return. If you have no US filing requirement other than the closer-connection statement, Form 8840 is mailed to the IRS on its own. There is no e-file option for Form 8840 — it must be mailed.

Form 8840 vs. Form 8843

Form 8840 and Form 8843 are related but serve different situations, and Canadian snowbirds should not confuse them:

  • Form 8840 — Closer Connection Exception Statement. Used by someone who metthe SPT but claims a closer connection to a foreign country (Canada) to be treated as a non-resident. This is the snowbird's form.
  • Form 8843 — Statement for Exempt Individuals and Individuals With a Medical Condition. Used to exclude specific days from the SPT count itself (for example, days you were medically unable to leave the US), rather than to claim a closer connection after the test is met.

In short: Form 8843 can reduce the days that go into the SPT calculation; Form 8840 is what you file when the SPT is met anyway and you want to keep Canadian tax residency.

What happens if you don't file Form 8840

If you meet the SPT and fail to file Form 8840 (and can't use the treaty tie-breaker), you default to US person status for that year. That carries the full set of US-person reporting obligations:

  • Worldwide income reporting on Form 1040 (not 1040-NR) — Canadian rental income, RRSP earnings, dividends, and employment income all become reportable to the IRS.
  • FBAR (FinCEN Form 114) — required once your foreign financial accounts exceed $10,000 USD in aggregate. Most snowbirds have Canadian bank accounts well above this threshold.
  • Form 8938 (FATCA) — required when foreign financial assets exceed the applicable threshold.

Penalties for missing FBAR alone are severe and compound annually, so filing Form 8840 in every year the SPT is met is the standard — and much cheaper — prevention.

Frequently asked questions

Do I have to file Form 8840 every year?

Yes. Form 8840 is an annual filing — you must file it for each year you meet the Substantial Presence Test and want to be treated as a Canadian tax resident under the Closer Connection Exception. For most snowbirds spending 121-180 US days a year, that means filing it every year.

When is Form 8840 due?

By your Form 1040-NR due date — June 15 for most snowbirds (Canadians with no US wages subject to withholding), or April 15 if you had US wages subject to US withholding. It is mailed to the IRS; there is no e-file option.

What is the Substantial Presence Test and how do I know if I met it?

Add current-year US days × 1 + prior-year days ÷ 3 + prior-prior-year days ÷ 6. If the weighted total is 183 or more, and you spent at least 31 days in the US during the current year, you met the SPT. Example: 150 days each of three years = 150 + 50 + 25 = 225, which is over 183.

What happens if I don't file Form 8840 in a year I met the SPT?

You default to US person status for that year. That means worldwide income reporting on Form 1040 (not 1040-NR) plus FBAR (foreign accounts over $10,000 USD aggregate) and potentially Form 8938 (FATCA). Penalties for missing FBAR alone are severe and compound annually, so filing Form 8840 each year the SPT is met is the standard prevention.

What if I spent 183 or more actual days in the US this year?

The Closer Connection Exception — and therefore Form 8840 — is unavailable once you exceed 183 actual US days in the current year. You would instead have to rely on the Canada-US treaty tie-breaker (Form 8833), which is materially more complex and almost always requires cross-border CPA assistance.

Form 8840closer connectionsubstantial presencesnowbirdCanadian

Simplify your cross-border tax prep

BorderBird automatically tracks your rental income, converts currencies using CRA-approved annual averages, and exports CRA-ready and IRS-ready reports your accountant can use to file Form 8840 with confidence.

Try BorderBird Free →