H-1B Specialty Worker
You hold an H-1B specialty occupation visa. Like TN holders you become a US tax resident upon passing the SPT, but your path often leads toward green card sponsorship, adding complexity around dual-status years.
US Status
Resident alien (passes SPT in first or second calendar year)
Canada Status
Non-resident or deemed non-resident after severing ties
Typical Forms Required
- Form 1040 (US Individual Income Tax Return)
- Form 1040-NR (for dual-status first year, if applicable)
- FinCEN 114 / FBAR
- Form 8938 / FATCA
- Form 3520 / 3520-A (if TFSA held)
- Form 8621 (PFIC reporting for Canadian mutual funds)
- T1 General (Canadian departure return)
Key Risks
Dual-status year complexity when transitioning from NRA to resident alien
PFIC exposure from holding Canadian mutual funds or ETFs
Failing to report Canadian RRSP to claim treaty deferral (Form 8891 is obsolete; proper disclosure still needed)
Missing FBAR filing for Canadian accounts
Step-by-Step Filing Guide
- 1
Identify whether your first US tax year is a dual-status year (part nonresident, part resident).
- 2
If dual-status, file Form 1040 with a Form 1040-NR statement for the nonresident portion.
- 3
Report worldwide income on Form 1040 for the resident portion of the year.
- 4
File FBAR for all Canadian financial accounts with aggregate balances exceeding $10,000 at any point.
- 5
Prepare Form 8938 if your specified foreign financial assets exceed the applicable threshold.
- 6
Report any Canadian mutual funds on Form 8621 as Passive Foreign Investment Companies.
- 7
Claim Foreign Tax Credits on Form 1116 to offset Canadian taxes paid.
Frequently Asked Questions
Am I a US tax resident in my first year on an H-1B?
It depends on your arrival date. You need 183 days of physical presence (under the SPT formula) to qualify. Many H-1B holders starting in October are nonresident for their first partial year and become resident the following January.
How does my H-1B status affect my Canadian RRSP?
Under Article XVIII of the Canada-US Tax Treaty, you can defer US tax on RRSP income. You no longer file Form 8891 (revoked in 2014), but you must make a proper treaty election and disclose the RRSP on FBAR and Form 8938.
What if I switch from H-1B to green card mid-year?
You remain a US tax resident throughout. The green card test makes you a resident from the first day you hold the card, so there is typically no change in filing status for that year.
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