Form 8840 for Canadian Snowbirds: Closer Connection Exception Steps

Form 8840 for Canadian snowbirds is the one-page statement that keeps a winter visitor from being treated as a U.S. tax resident. Canadians who spend months each year in Florida, Arizona, Texas or California can pass the U.S. substantial presence test long before they reach 183 days in a single year, because earlier years count too. If you pass the test but stay under 183 days in the current year, Form 8840 lets you claim the closer connection exception and remain a nonresident for U.S. tax. Skip the form and the IRS can treat you as a resident with worldwide U.S. reporting.

When is Form 8840 for Canadian snowbirds required?

Often yes, and without any single year feeling long. The formula multiplies each prior year's days by a fraction. Look at what happens when the same number of days is spent each year:

The IRS does not count days you commute to work in the United States from Canada, days of less than 24 hours in transit between two foreign places, or days you could not leave because of a medical condition that arose in the United States. Excluding a medical-condition day requires Form 8843. Our U.S. tax residency tests page covers the other exempt categories.

Who qualifies for the closer connection exception?

You qualify if all of these are true for the year:

• You were present in the United States fewer than 183 days.
• You maintained a tax home in Canada for the entire year.
• You had a closer connection to Canada than to the United States.
• You have not applied for a green card or taken steps toward one, and you do not hold one.

The IRS looks at facts such as your permanent home, family, personal belongings, driver's licence, voting registration, and the country you list on forms. A home in Canada must be available to you continuously, not just during short stays. If you hold a W-9 or give a U.S. address to a bank, your forms may point the other way, so keep documents consistent.

How do you file Form 8840 step by step?

1. Count your days for the current year and the two prior years from a calendar, passport stamps, flight records and receipts.
2. Run the formula and note whether you meet the test.
3. Check the exception conditions above, particularly the 183-day cap for the current year.
4. Complete Form 8840, Part I with your visa or status information and travel dates, then Part II for a closer connection to one foreign country, and finally the Part IV questions about your ties.
5. File it on time. If you also file Form 1040-NR, attach Form 8840. If you do not need a return, mail it to the IRS center in Austin, Texas shown in the Form 8840 instructions by the due date for Form 1040-NR, including extensions.
6. File a separate form for each adult. Spouses cannot share one form.
7. Repeat every year you meet the test and want the exception.

What documents help prove your Canadian ties?

• A dated calendar of days in each country, with border records
• Canadian property deed or lease, and proof the home was available
• Provincial health card, driver's licence and passport
• Canadian bank, credit card and investment statements
• Voting registration and club or religious memberships in Canada
• Proof of Canadian residence on tax and payroll forms

What are the deadlines and penalties?

Form 8840 is due when the nonresident return would be due. For 2025 that was April 15, 2026 for employees with wages subject to U.S. withholding and June 15, 2026 for others, with extensions available. The instructions describe the consequence of filing late as losing the exception: you cannot claim it unless you show by clear and convincing evidence that you took reasonable steps to learn the rule and to comply. In practice that can mean being treated as a U.S. resident for the year. The Form 8840 instructions also say that if you cannot use the exception because you were present 183 days or more, a tax treaty may still give nonresident status; see the US Canada tax treaty guide.

What does Canada expect from snowbirds?

The CRA treats most snowbirds as factual residents of Canada. You report world income in Canadian dollars, and the CRA asks that you not enter departure and entry dates on your return, which can reduce credits. Check that provincial health coverage continues while you are away, because each province sets its own rules. If you hold specified foreign property costing more than C$100,000, such as a U.S. condo you rent out, you file Form T1135; see T1135 reporting. U.S. tax paid on U.S. income you report in Canada can support a foreign tax credit on Form T2209. See also the Canadian residency rules.

What changes if you own U.S. property?

Rental income from a U.S. property is taxed at a flat 30% on gross rent unless you choose to be taxed on net income, a choice that IRS Publication 519 explains. A sale by a foreign seller generally carries 15% withholding at closing under FIRPTA, with reduced rates for some low-value residences. Ownership also exposes you to U.S. estate tax on U.S. assets; read Canadian-owned U.S. real estate and estate tax before you buy.

Worked example

Walter and Joan live in Mississauga and winter in Scottsdale. They spent 120 days in the United States in 2023, 150 in 2024 and 150 in 2025. For 2025 each has 150 + 50 + 20 = 220 weighted days, so both meet the substantial presence test. Because each was in the United States fewer than 183 days in 2025, kept their Mississauga home available, and have no green card steps, they can each file Form 8840 by June 15, 2026. If Walter had stayed 185 days in 2025, the exception would not be available, and the treaty tie-breaker would be the fallback. Numbers are hypothetical.

Mistakes to avoid

• Believing that fewer than 183 days in one year means no U.S. issue.
• Forgetting the form because "we are Canadian residents".
• Filing one form for both spouses.
• Filing late and hoping the IRS overlooks it.
• Applying for a green card or a long-term U.S. visa without checking the closer connection effect.
• Letting U.S. banks and brokers carry W-9 forms with a U.S. address.

How we can help

We are a U.S. CPA firm serving the Aurora, Illinois area, and we prepare Forms 8840, 8843, 1040-NR and treaty disclosures for Canadian visitors and owners of U.S. property. We coordinate with your Canadian CPA so the T1 and your U.S. position agree. Read about our cross-border tax services, real estate investor tax and relocation and immigration tax planning. If your winter plans are turning into a move, see Canadians living in the U.S., and the cross-border hub.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.