How to File Form 8621 for Canadian ETFs and Mutual Funds

You file Form 8621 by attaching one form for each Canadian fund to your US income tax return and filing both by the return’s due date, extensions included. What goes on each form depends on which of three tax regimes the fund sits in, and that depends on elections made, or not made, in the first year you owned it. If you’re still working out whether your funds are PFICs at all, start with what a PFIC is and why Canadian funds usually are.

Who has to file Form 8621?

Generally, a US person who owns a PFIC directly or indirectly files Form 8621 for each tax year in which one of five things happens. The Form 8621 instructions (Rev. December 2025) list them, and the fifth, the annual report under section 1298(f), is the one that reaches people who hold Canadian funds and never sell. A US citizen or green card holder in Canada with a taxable brokerage account is the usual case.

The five triggers, in the instructions’ words, are when you:

1. “Receives certain direct or indirect distributions from a PFIC,”
2. “Recognizes gain on a direct or indirect disposition of PFIC stock,”
3. “Is reporting information with respect to a Qualified Electing Fund (QEF) or section 1296 mark-to-market election,”
4. “Is making an election reportable in Part II of the form, or”
5. “Is required to file an annual report pursuant to section 1298(f).”

Section 1298(f) is short: “each United States person who is a shareholder of a passive foreign investment company shall file an annual report containing such information as the Secretary may require.” Form 8621 is that report. Holding through a structure can still count. The instructions treat you as an indirect shareholder if, for example, you own a PFIC that itself owns another PFIC, or you own a pass-through entity that holds one.

When can I skip Form 8621?

You can skip Part I for a fund when a filing exception applies, and the one most Canadians use is the $25,000 exception. It’s measured across all the PFIC stock you own on the last day of your tax year, and it only works for a section 1291 fund with no excess distribution and no sale that year. Joint filers get $50,000 combined. There’s also a $5,000 exception for a small fund you hold through another PFIC.

Exception	Who it fits	Conditions	Source
$25,000 aggregate ($50,000 joint)	Small direct holdings with no election	All PFIC stock, including QEF and mark-to-market stock but not stock held through another US person or another PFIC, worth $25,000 or less on the last day of your tax year; the fund is a section 1291 fund; no excess distribution and no sale from that fund	i8621; Reg. 1.1298-1(c)(2)
$5,000 indirect	A small PFIC you own through another PFIC, as in a fund of funds	Your proportionate share of that section 1291 fund worth $5,000 or less on the last day of the year; no excess distribution and no sale	i8621
Treaty pension fund	Funds inside an RRSP or RRIF	The plan is a pension fund under the treaty, its income is taxable to you only when paid out, and your Article XVIII(7) deferral election is in effect	Reg. 1.1298-1(c)(4); T.D. 9806
US tax-exempt accounts	A US IRA, 529 plan or similar	Owning PFIC stock through the listed US accounts means you aren’t treated as the PFIC’s shareholder	i8621

The $25,000 test is a trap for people who hold several small funds. Four funds at $7,000 each come to $28,000, so none of them qualifies, even though each one alone is tiny.

The RRSP and RRIF line needs the most care. Reg. 1.1298-1(c)(4) says a member of an arrangement “treated as a foreign pension fund (or equivalent) under an income tax treaty” isn’t required to file Form 8621 for a PFIC held inside it, if under the treaty the fund’s income “may be taxed as the income of the shareholder only when and to the extent the income is paid to” the shareholder. The preamble to T.D. 9806 names Article XVIII(7) of the Canada-US treaty and applies the rule “to the extent that the election is in effect.” Under Rev. Proc. 2014-55, an “eligible individual” is treated as having made that election automatically. Whether you’re an eligible individual is covered in the Form 8891 guide. A TFSA isn’t on this list; its funds are treated separately, and the TFSA trust question comes first.

Do I file one Form 8621 per fund?

Yes. The instructions say “a separate Form 8621 must be filed for each PFIC in which stock is held directly or indirectly,” so ten Canadian funds can mean ten forms. One form per fund carries everything for that fund for the year: Part I’s annual summary, any election in Part II, and the income figures in Parts III to V. Spouses on a joint return can file a single form for a fund they both own.

A fund of funds adds forms. Where you own one PFIC and through it own others, the instructions require “a Form 8621 for each PFIC in the chain” when one of the five triggers applies to that lower-tier fund. Most Canadian retail funds are held directly, so this usually comes up with wrap or portfolio products. Your fund count is what drives both the work and what Form 8621 costs to prepare.

Which PFIC regime applies to my Canadian fund?

The default is section 1291, the excess distribution regime, and a fund stays there unless you made a QEF election or a mark-to-market election. Each regime fills in a different part of the form and taxes you differently. The election you made in the first year you held the fund decides most of this, which is why late elections behave differently.

Regime	How it taxes you	What you need	Form 8621 part
Section 1291 (default)	Nothing extra in a quiet year; an excess distribution or a gain on sale is spread over your holding period, earlier years taxed at that year’s top rate plus interest	Your purchase dates, lots and distribution history	Part I, plus Part V when you sell or get an excess distribution
QEF, section 1295	Your share of the fund’s ordinary earnings as ordinary income and its net capital gain as long-term gain, every year, paid out or not	A PFIC Annual Information Statement from the fund for each year	Parts I, II (box A in the first year) and III
Mark-to-market, section 1296	The year’s rise in value as ordinary income; a fall is deductible only up to earlier inclusions	Marketable stock, plus year-end value and basis	Parts I, II (box C in the first year) and IV

Under section 1291, an excess distribution is the part of this year’s distributions above 125% of the average you received in the 3 preceding years (or your holding period before this year, if shorter), and none of a distribution in your first year of ownership counts. A gain on sale is treated entirely as an excess distribution. Section 1291(c) taxes the slices allocated to earlier PFIC years at “the highest rate of tax in effect for such taxable year,” with interest at the underpayment rate.

A QEF election only works if the fund gives you its PFIC Annual Information Statement, so ask the fund company before you count on it. Mark-to-market needs “marketable stock,” which for a Canadian ETF means units regularly traded on an exchange that meets the test in Reg. 1.1296-2: traded, other than in de minimis quantities, on at least 15 days during each calendar quarter, on a government-regulated foreign exchange with the regulation’s listed characteristics.

When do I have to make the QEF or mark-to-market election?

Both elections are made on Form 8621 attached to a timely return, by the due date including extensions, for the first year the election is to apply. The QEF election should cover the first year of your holding period. If it doesn’t, the fund is still treated as a section 1291 fund until a purging election clears the earlier years. A mark-to-market election made after your first year has a one-time catch-up of its own.

For a QEF, the instructions set the deadline as the due date, with extensions, “for filing the shareholder’s income tax return for the first tax year to which the election will apply.” A retroactive QEF election is possible only under the protective statement regime, which needs a statement filed in time, or the consent regime, which needs IRS permission requested “before the PFIC status issue is raised on audit.” A QEF election made after the first year gives you an unpedigreed QEF, and the instructions add that a distribution from one is also subject to the section 1291 rules. A deemed sale election (box D) or, for a fund that’s also a CFC, a deemed dividend election (box E) can purge the earlier years.

For mark-to-market, the election “must be made on or before the due date (including extensions) of the U.S. person’s income tax return for the tax year in which the stock is marked to market.” Once made, it applies to later years unless revoked or terminated. Made after your first year, with no QEF in place, section 1296(j) and the instructions treat the stock as sold at year-end value and the gain as an excess distribution under section 1291. You’d complete Part V that year, not Part IV.

How do I fill out Form 8621 line by line?

Start with the identifying block at the top, then fill in only the parts your regime calls for. Every filer completes Part I unless an exception applies. Part II is for elections, Part III for a QEF, Part IV for mark-to-market and Part V for section 1291 events. The line numbers below are from the December 2025 revision of the form.

1. Top of page 1. Your name, address, SSN or other IRS-issued taxpayer number, and tax year, and the fund’s name and address. If the fund has no EIN, make up a reference ID number: letters and numbers only, up to 50 characters, and the same one every year.
2. Part I, lines 1 to 5. Line 1 describes each class of shares, line 2 the date you bought shares during the year, line 3 the shares held at year end, line 4 their year-end value (checked in a range, or listed above $200,000), and line 5 the regime and the amount under section 1291, 1293 or 1296. For line 4 you may rely on the fund’s periodic statements unless you know they don’t reflect a reasonable value.
3. Part II. Check box A for a QEF election or box C for mark-to-market, in the year you elect. Boxes D and E are the purging elections for an unpedigreed QEF.
4. Part III, lines 6a to 7c (QEF). Your share of ordinary earnings goes on line 6c as ordinary income, and your share of net capital gain on line 7c as long-term gain on Schedule D.
5. Part IV, lines 10a to 14c (mark-to-market). Line 10a is year-end value, line 10b your adjusted basis, line 10c the difference. A gain is ordinary income on the “other income” line. A loss goes to line 11 (unreversed inclusions) and line 12, which allows it only up to those inclusions. Lines 13a to 14c cover units sold during the year.
6. Part V, lines 15 and 16 (section 1291). Enter the three-letter currency code above line 15a. Lines 15a to 15e work out the excess distribution, line 15f the gain on a sale, and line 16 the tax and interest, on an attached sheet that divides the amount by the days in your holding period.

The instructions add that the excess distribution must generally be worked out in US dollars, with each distribution translated at the spot rate on the day it’s paid, unless every distribution in the calculation was in one foreign currency.

Where do I file Form 8621, and what if I miss it?

Attach each Form 8621 to your tax return and file them together by the return’s due date, including extensions, at the IRS service center where the return goes. If you don’t have to file a return for the year, the instructions send Form 8621 on its own to the Internal Revenue Service Center, Ogden, UT 84201-0201. A missing form has a cost that’s easy to miss: the IRS’s time to assess tax stays open.

Section 6501(c)(8) covers information required “under section 1298(f),” and for those years the time to assess “shall not expire before the date which is 3 years after the date on which the Secretary is furnished the information.” If the failure was due to reasonable cause and not willful neglect, that extended window applies “only to the item or items related to such failure.” If you’ve missed several years and also owe tax, streamlined filing with Canadian funds walks through the catch-up.

Form 8621 also interacts with your other foreign reporting. There’s a checkbox on page 1 for filers who also file Form 8938 and count this Form 8621 on Form 8938’s Part IV, and the FBAR runs on its own rules; Form 8938 vs the FBAR sorts out which you need.

Related PFIC guides

• What you can invest in without PFIC problems, for the next purchase rather than the last one
• What Form 8621 costs to prepare, with published prices per fund
• Are Canadian mutual funds and ETFs PFICs?, the PFIC hub

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.