FATCA Reporting Rules for U.S. Immigrants

A bank account you kept open before moving to the United States can create a U.S. reporting obligation even if it earns little interest and you never transfer money from it. FATCA reporting rules are one reason. They can affect H-1B workers, green-card holders, and other immigrants who become U.S. tax residents while still holding savings, investments, pensions, or other assets abroad.

The key point is that your immigration status and your tax status are not always the same. A visa does not automatically make you subject to FATCA reporting, but becoming a U.S. tax resident often does. The rule is based on who you are for U.S. tax purposes, what foreign financial assets you own, and their combined value.

What FATCA reporting rules require

FATCA is the Foreign Account Tax Compliance Act. For individuals, its main filing requirement is Form 8938, Statement of Specified Foreign Financial Assets. When required, you attach Form 8938 to your federal income tax return.

Form 8938 is intended to report specified foreign financial assets. Common examples include a checking, savings, brokerage, or investment account maintained at a foreign financial institution. It can also include foreign stocks, bonds, mutual funds, partnership interests, certain foreign trusts, and some foreign pension or deferred-compensation arrangements.

You may need to report an asset even when it produces no taxable income. Reporting an account and paying tax on its income are related but separate issues. If a foreign account earns interest, that interest may be taxable on your U.S. return. But an account with no income can still be reportable if your total foreign assets meet the filing threshold.

FATCA also requires many foreign financial institutions to identify and report accounts held by U.S. persons. That is why a bank in your home country may ask for a U.S. Social Security number, taxpayer identification number, or Form W-9 after you move to the United States. The bank's reporting is separate from your own potential Form 8938 obligation.

Who may need to file Form 8938?

Form 8938 generally applies to specified individuals, including U.S. citizens, green-card holders, and resident aliens for U.S. tax purposes. A nonresident alien who elects to be treated as a resident alien for a joint return may also be covered.

For immigrants, the biggest question is usually whether you have become a resident alien under the substantial presence test or through a green card. An H-1B or L-1 worker often becomes a U.S. tax resident after spending enough days in the country. An F-1 student or J-1 exchange visitor may be treated differently because certain days can be excluded from the substantial presence calculation while that person remains an exempt individual under the tax rules.

Do not assume that a visa label answers the question. An F-1 student on OPT, for example, may eventually become a resident for tax purposes depending on prior years and days in the United States. A green-card holder generally remains a U.S. tax resident unless their status is properly ended for tax purposes. If your residency changed during the year, a dual-status return may require closer review.

Form 8938 thresholds depend on where you live

You do not file Form 8938 simply because you own a foreign account. Your filing requirement begins only when the total value of your specified foreign financial assets exceeds the applicable threshold.

If you live in the United States and file as single or married filing separately, Form 8938 is generally required when your specified foreign assets exceed $50,000 on the last day of the tax year or $75,000 at any point during the year. For married couples filing jointly while living in the United States, the thresholds are generally $100,000 at year-end or $150,000 at any point during the year.

Higher thresholds may apply if you qualify as living abroad for this purpose. A single filer living abroad generally has thresholds of $200,000 at year-end or $300,000 at any time during the year. For married couples filing jointly and living abroad, the thresholds generally rise to $400,000 and $600,000.

Living abroad has a specific tax meaning. It is not enough to take a long trip or maintain a foreign address. The rules generally connect to the tests used for the foreign earned income exclusion, including a bona fide residence test or physical presence test. Many people who have relocated to the United States will use the lower, domestic thresholds even if most of their money remains overseas.

The thresholds apply to the combined value of all specified foreign financial assets. Three accounts that each hold less than $50,000 can still trigger Form 8938 if their total value crosses the threshold. You generally report the maximum value during the year, using a reasonable method to convert foreign currency to U.S. dollars.

Foreign real estate held directly, such as an apartment you own in your name, is generally not itself a specified foreign financial asset for Form 8938. But shares in a foreign company that owns that apartment may be reportable. This distinction matters for families who retain property or inherit assets abroad.

FATCA vs. FBAR: why many people need both

Form 8938 is often confused with the FBAR, officially FinCEN Form 114. They are not the same filing, and one does not replace the other.

The FBAR generally applies when the combined balance of foreign financial accounts exceeds $10,000 at any time during the calendar year. That is a much lower threshold than Form 8938. It is filed electronically with FinCEN, not attached to your federal tax return. The FBAR is generally due April 15, with an automatic extension to October 15.

Form 8938 is filed with your income tax return and uses different thresholds and a broader category of assets. A foreign brokerage account may appear on both forms. A direct ownership interest in a foreign business may be relevant to Form 8938 even though it is not a foreign bank account for FBAR purposes.

For a common example, imagine an H-1B worker who has $30,000 in a savings account in India and $20,000 in a foreign brokerage account. Their combined foreign account balance is $50,000. They may have an FBAR filing requirement because the aggregate amount exceeded $10,000. If they file as single and live in the United States, they may also need Form 8938 because their specified foreign assets exceeded the applicable threshold.

How to prepare without guessing

Start early, especially if you have accounts in more than one country. Foreign banks may issue annual statements on a different schedule from U.S. tax documents, and obtaining historical maximum balances can take time.

Create a simple record for each foreign asset: the institution or issuer, account number or identifying details, country, maximum value during the year, income earned, and whether anyone else has signature authority. Save bank statements, brokerage reports, pension records, and currency conversion support with your tax records.

Be especially careful with accounts you do not think of as investments. These can include a payroll account left open in your home country, an account shared with a parent, an overseas retirement plan, employee share plans, and an account where you only have authority to sign. The reporting treatment depends on the facts, so do not exclude an account just because the money is not entirely yours.

Some foreign assets may also require other information returns, such as forms for foreign corporations, partnerships, trusts, gifts, or passive foreign investment companies. Form 8938 has coordination rules for certain assets reported elsewhere, but that does not always eliminate the need to file it. It may reduce duplicate detail while leaving the core FATCA obligation in place.

If you are not required to file a federal income tax return, you generally are not required to file Form 8938. That does not automatically remove an FBAR requirement. This is one of several reasons it is risky to treat all foreign-account reporting as a single checklist.

What happens if you miss Form 8938

The initial penalty for failing to file Form 8938 when required can be $10,000. If the IRS sends a notice and the failure continues, additional penalties can apply, generally increasing by $10,000 for each 30-day period up to a maximum additional penalty of $50,000. Understatements of tax tied to undisclosed foreign financial assets can also face a 40% accuracy-related penalty.

A missed filing is not always intentional. New residents often receive incomplete advice from relatives, foreign banks, or preparers who focus only on U.S. income. If you discover an omission, gather the account records before filing anything corrective. The best response depends on whether prior returns were filed, whether income was omitted, and whether an FBAR was also missed.

Treat foreign accounts as part of your move-to-America paperwork, not as an issue to revisit only when a bank asks questions. A 30-minute annual inventory of overseas assets can give you the records and clarity you need before tax season becomes urgent.