Do I File a T1135 for My US Accounts? And What If I'm Years Late?

Almost certainly yes, if you’re a Canadian tax resident and the total cost amount of your specified foreign property was over $100,000 at any time in the year while you were resident. US brokerage accounts, US bank accounts and US shares all count toward that line under ITA 233.3. US retirement accounts are the unsettled cell, and the three common wrappers don’t sit on the same footing there. And if you’re years late, there are two routes back: file the missed forms late, or apply to the CRA’s Voluntary Disclosures Program under the rules that took effect October 1, 2025. Neither route’s relief is automatic.

Do my US brokerage and bank accounts count toward the $100,000?

Yes, in almost every case. The definition of specified foreign property in ITA 233.3(1) opens with funds or intangible property “situated, deposited or held outside Canada” and separately lists “a share of the capital stock of a non-resident corporation” and “indebtedness owed by a non-resident person”. A US bank balance, a US brokerage account and the US stocks and bonds inside it all sit in those paragraphs. The $100,000 test reads on cost amount, generally your adjusted cost base, counting only time you were a Canadian resident.

“reporting entity for a taxation year or fiscal period means a specified Canadian entity for the year or period where, at any time (other than a time when the entity is non-resident) in the year or period, the total of all amounts each of which is the cost amount to the entity of a specified foreign property of the entity exceeds $100,000” (ITA 233.3(1))

The form is due with your return: ITA 233.3(3) sets the deadline at your filing-due date for the year. The CRA’s Form T1135 questions page confirms the threshold reads on cost amount, “generally … the adjusted cost base and not the fair market value”, and that shares of non-resident corporations count “regardless of whether the shares are held through a broker”. Where your US securities sit with a Canadian registered securities dealer, the same page lets you report them as one aggregate per country in Category 7 rather than line by line. And the CRA’s main T1135 page adds the two-tier structure: Part A is the simplified option where your total was more than $100,000 but stayed under $250,000 throughout the year, and Part B, the detailed method, applies once the total reached $250,000 at any time.

What you hold	Counts toward the $100,000?
US bank account (cash on deposit)	Yes: funds deposited or held outside Canada, ITA 233.3(1) para (a)
US brokerage account and the US shares and bonds in it	Yes: paras (a), (c) and (g); the CRA says broker location doesn’t change it
US shares held through a Canadian registered securities dealer	Yes, still specified foreign property; CRA permits aggregate Category 7 reporting
US assets held inside your RRSP or TFSA	No: the CRA states property in an RRSP or TFSA “is excluded from Form T1135 reporting requirements”
Traditional IRA	Strongest statutory footing of the three: a 408(a) trust is on Regulation 6803’s prescribed list, which routes into the ITA 233.3(1)(n) exclusion, but no general CRA confirmation is published; next section
401(k), Roth IRA	Unsettled or conditional on published guidance; next section
US vacation home you use primarily personally	No: personal-use property is excluded by para (p), where the use is primarily (more than 50%) personal on the CRA’s reading

What about my IRA, 401(k) and Roth IRA?

Three wrappers, three different footings, and only one of them has a clean statutory chain. The statute excludes an interest in a trust described in paragraph (a) or (b) of the “exempt trust” definition in ITA 233.2(1), and paragraph (a) reaches a trust governed by a foreign retirement arrangement, a term the regulations define by pointing at three subsections of the US Code.

“6803 For the purposes of the definition foreign retirement arrangement in subsection 248(1) of the Act, a prescribed plan or arrangement is a plan or arrangement to which subsection 408(a), (b) or (h) of the United States’ Internal Revenue Code of 1986, as amended from time to time, applies.” (Regulation 6803)

Follow that list back and the traditional IRA has the cleanest chain of the three, because 408(a) is the subsection that defines the term. IRC 408(a) reads “individual retirement account” as “a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries” whose governing instrument meets listed requirements, so on the text a traditional IRA is a plan to which 408(a) applies: prescribed plan under Regulation 6803, then foreign retirement arrangement, then exempt trust under paragraph (a), then outside specified foreign property under 233.3(1)(n). What’s open is confirmation rather than the chain. No general CRA statement applies it, s.408 also reaches annuities under (b) so the answer still turns on your own account’s legal form, and the folio quoted in the next paragraph describes the forms as carrying IRA references that apply to traditional ones. So treat the chain as unconfirmed rather than closed.

The Roth and the 401(k) stay genuinely open, so treat any flat yes or no on either as going further than the sources. Roth IRAs are designated under IRC 408A, a section Regulation 6803’s list doesn’t name, though s.408A(a) also says a Roth “shall be treated for purposes of this title in the same manner as an individual retirement plan” except as that section provides, which is the two-directional reading the CRA has never settled in print. What the CRA has published for the Roth is administrative and conditional: where the treaty election has been filed and no Canadian contribution has been made, Folio S5-F3-C1 says the CRA “does not require” Roth information on Form T1135, and the same folio adds that the forms’ references to an IRA apply “only to traditional IRAs, not Roth IRAs”. Fail either condition and the folio puts the Roth back on the forms as applicable. The full four-state analysis lives in does a Roth IRA stay tax-free in Canada, which leaves the underlying statutory question open on purpose, and so does this page. For a 401(k), nothing published names the plan; the exempt-trust paragraph (b) conditions are a per-file reading of the plan trust’s documents. The mirror problem, the IRS reading a Canadian plan wrapper with no named answer, is on what happens to my LIRA when I move to the US.

I was only a Canadian resident for part of the year. Which part counts?

Only the resident part, and the arrival year may be exempt entirely. The reporting-entity test measures your cost amounts “at any time (other than a time when the entity is non-resident) in the year”, so months before you arrived or after you left sit outside the measurement. On top of that, ITA 233.7 exempts an individual who first became resident in Canada in the year from filing at all for that year, and for a new resident the CRA sets the cost amount of foreign property at its fair market value on the day residence started, which becomes the number you test in every later year.

“233.7 Notwithstanding sections 233.2, 233.3, 233.4 and 233.6, a person who, but for this section, would be required under any of those sections to file an information return for a taxation year, is not required to file the return if the person is an individual (other than a trust) who first became resident in Canada in the year.” (ITA 233.7)

The trap is the word “first”. If you lived in Canada before, left, and came back, the moving-back-to-Canada checklist, which owns the arrival-year decision, puts it this way after looking: “we found no CRA statement extending the exemption to a returning former resident, so confirm it applies before you rely on it.” This page takes the same position. A return year gets decided deliberately, on the statute’s words, before anyone relies on an exemption written for a first-time resident.

On the way out, the CRA’s questions page says it “only requires information on specified foreign property for the period you were a resident of Canada” and that you may complete the form as if your year ended on the date residence ceased. Everything else departure-side, T1161 and T1243 included, belongs to the leaving-Canada checklist.

What happens if I just never filed?

Penalties attach per unfiled return, and the T1135 is an annual filing, so each missed year carries its own exposure whether or not any tax was owing. The base penalty under ITA 162(7) is the greater of $100 and $25 a day for up to 100 days, so it tops out at $2,500 per unfiled year. Where a failure was made knowingly or under circumstances amounting to gross negligence, s.162(10) can add up to $500 a month for 24 months, and past 24 months s.162(10.1) can add 5% of the property’s cost, each net of penalties already levied.

Provision	What triggers it	Amount, as the CRA’s table states it
s.162(7)	A late or unfiled T1135, no mental-state condition	”$25 per day for up to 100 days (minimum $100 and maximum $2,500)” per return
s.162(10)(a)	Failure to file made knowingly or with gross negligence	”$500 per month for up to 24 months (maximum $12,000), less any penalties already levied”
s.162(10)(b)	Knowing or grossly negligent failure to comply with a s.233 demand to file	”$1,000 per month for up to 24 months (maximum $24,000), less any penalties already levied”
s.162(10.1)	A s.162(10) failure that runs past 24 months	5% of the cost of the foreign property, less penalties already levied

Figures as stated on the CRA’s table of penalties; the statutory formulas are in ITA 162.

There’s a quieter cost. Where you failed to report income from specified foreign property on your return AND the T1135 wasn’t filed, wasn’t filed on time, or carried a false statement or omission, the reassessment period for the year is extended by an additional three years. ITA 152(4)(b.2) sets both limbs out in the conjunctive, and the CRA states the same rule. Both conditions matter: a late form with all income properly reported doesn’t, on the statute’s wording, hold the year open longer.

I’m years behind. Should I use the VDP or just file late?

Those are the two routes, and this page won’t pick one for you, because the choice turns on facts only your file has. Late filing means submitting the missed forms now and, if penalties are assessed, asking relief under the taxpayer relief provisions, which the CRA considers “on its own merit and circumstances” on written request. The VDP is the structured alternative: one application under the rules in effect since October 1, 2025, with published relief levels that apply if the CRA accepts it. On both routes, relief is discretionary and case by case; the CRA publishes no grant rate for either.

	File late, ask taxpayer relief	VDP (rules from October 1, 2025)
What you submit	The missed T1135s, plus Form RC4288 if you ask relief from assessed penalties	Form RC199 plus the missed forms; most recent ten years for foreign assets
Timing gate	None published; a form under a year late can only take this route	Only available once the information is at least one year past its due date
Audit timing	No published pre-audit condition on filing the forms	Application must precede an audit or investigation on the disclosed issue
Penalty relief	Discretionary, “on its own merit and circumstances”, no published level	Where granted: 100% (general) or up to 100% (partial) of applicable penalties
Interest relief	Discretionary under the same provisions, no published level	Where granted: 75% (general) or 25% (partial) of applicable interest
Prosecution and gross-negligence exposure	No equivalent published protection on this route	Where relief is granted, the CRA states prosecution protection applies and gross negligence penalties will not apply
If refused	Normal objection and relief-review rights for the underlying assessment	No objection right on the VDP decision; a second administrative review, then Federal Court judicial review

The mechanics behind the table, from the CRA’s program pages: the application form is RC199, and a missed T1135 is on the CRA’s own list of eligible situations. An application must meet five conditions, including that it lands before an audit or investigation has been initiated on the issue, that the information is at least one year past its due date, and that estimated tax owing is paid or a payment arrangement requested. For foreign-sourced income or assets, the application covers the most recent ten years. Relief has an outside boundary of its own on either route: ITA 220(3.1) lets the Minister waive or cancel a penalty only for a tax year ending within the previous ten calendar years, so years older than that sit outside the relief power entirely. An unprompted application, one made before any CRA communication about the issue beyond a general education letter, is “normally” considered for general relief: 75% of applicable interest and 100% of applicable penalties. A prompted application, one made after the CRA has written about an identified issue or holds third-party information on it, is normally considered for partial relief: 25% of interest and up to 100% of penalties. And where relief is granted at any level, the CRA states it will grant protection from criminal prosecution and that gross negligence penalties will not apply.

What the published mechanics support saying generically: a file that’s less than a year late can’t meet the VDP’s timing condition at all, an unprompted multi-year file that meets all five conditions is the fact pattern the program’s general-relief tier is written for, and a file the CRA has already written to you about, beyond a general education letter, is normally partial-relief territory. Past that, which route serves your file better depends on how many years are open, whether income also went unreported, and what contact you’ve had from the CRA. That call is yours to make, on your facts, ideally with advice on them.

What should I do next?

Three jobs, in order. Inventory every non-registered US account and pin each one’s cost amount, using the value on the day your Canadian residence started where that’s what set your cost. Count the missed years and check each against the $100,000 test for time you were resident. Then pull together every letter the CRA has sent you, because whether your file is prompted or unprompted is set by the record, and decide the route with the whole picture in front of you.

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