Residence-Based Taxation for Americans in Canada: H.R. 10468 and Current Filing Rules
On this page
- Which bill version does this guide examine?
- Section 899A and trust interests
- What the sponsor announced
- The proposal and existing double-tax relief
- RRSPs: existing relief and reporting
- TFSAs: review the account rather than assuming an exemption
- FBAR and Form 8938: current duties versus proposed relief
- Who is covered by the introduced proposal?
- How the proposed departure tax is structured
- US income still needs a separate analysis
- Self-employment in Canada: current coverage and income sourcing
- RBT proposals and citizenship renunciation are different decisions
- Keep enacted tax changes separate from RBT proposals
- Foreign trusts: assess ownership, transactions and reporting separately
- What to review before changing your filings
What did H.R. 10468 propose for Americans living in Canada? This guide distinguishes the introduced bill from existing reporting rules and identifies questions to review before changing tax filings.
The version examined here is the Residence-Based Taxation for Americans Abroad Act introduced in the 118th Congress on December 18, 2024. An introduced bill is not authority to stop filing returns or account reports.
Read the official bill record alongside current IRS guidance. A later proposal must be assessed using its own bill number, text and legislative actions.
Which bill version does this guide examine?
GovInfo identifies H.R. 10468 as an introduced House bill from the 118th Congress. Its record lists introduction by Representative Darin LaHood and referral to the House Committee on Ways and Means on December 18, 2024.
This record establishes the version discussed here; it does not establish the status or contents of a later bill. Do not treat commentary about likely reintroduction, a possible vote or projected passage as enacted tax relief.
Source: GovInfo H.R. 10468 introduced-bill record, read September 24, 2026.
Section 899A and trust interests
The introduced bill’s proposed section 899A contains the deemed-sale rule and its exceptions. Its nongrantor-trust exception refers to the portion of a trust that the specified electing individual is not considered to own under the cited grantor-trust rules, determined immediately before the election date.
That distinction does not classify a particular TFSA, FHSA or other arrangement. Establish the arrangement’s legal terms and US tax classification before modeling a proposed election. This article does not substantiate predictions about revisions requested by the Joint Committee on Taxation.
Source: H.R. 10468 as introduced, proposed section 899A(d)(1)(D) and (d)(4), read September 24, 2026.
What the sponsor announced
LaHood’s December 18, 2024 announcement described an elective approach for Americans abroad and invited feedback ahead of hoped-for reintroduction in the 119th Congress. That announcement describes the sponsor’s intentions at the time; it is not evidence of subsequent enactment or a guaranteed timetable.
Source: LaHood’s original announcement, read September 24, 2026. For proposed statutory conditions, use the bill text rather than a press-release summary.
The proposal and existing double-tax relief
The introduced bill proposes residency-based treatment for electing individuals under specified conditions. Its proposed reporting exemptions are separate from the foreign earned income exclusion and foreign tax credit available under existing rules.
| Rule | What to check |
|---|---|
| Foreign earned income exclusion | Foreign earned income, a foreign tax home and the applicable bona fide residence or physical presence test; the exclusion has an annual limit. |
| Foreign tax credit | Whether foreign taxes qualify and the applicable credit limitations. Taxes on income excluded under the FEIE cannot also generate a credit. |
| Introduced RBT proposal | The bill’s election, residency, departure-tax and reporting provisions. Proposed language does not replace existing filing rules. |
Do not assume either existing relief mechanism eliminates every tax or information return. Compare the relevant income, taxes and reporting obligations for the actual year.
Sources: IRS FEIE requirements; IRS foreign tax credit guidance; introduced H.R. 10468. Read September 24, 2026.
RRSPs: existing relief and reporting
Under Revenue Procedure 2014-55, eligible individuals are treated as having elected US tax deferral on undistributed RRSP income. Eligibility includes satisfying US return-filing requirements, not previously reporting undistributed plan earnings as income, and reporting distributions consistently with treaty deferral. Individuals who previously reported undistributed earnings must seek IRS consent to elect this treatment.
Form 8891 is obsolete. The procedure does not remove applicable FBAR or Form 8938 reporting obligations. Distributions remain subject to US income-inclusion rules and any applicable treaty provisions. These existing rules should be checked before making decisions based on proposed RBT changes.
Source: IRS Revenue Procedure 2014-55, sections 4–6, read September 24, 2026.
TFSAs: review the account rather than assuming an exemption
The CRA describes TFSA arrangements that can take different legal forms, including a trust, an annuity contract or a deposit. The TFSA label alone is not a complete US trust-reporting analysis.
US citizens and resident aliens abroad generally remain subject to US tax on worldwide income. Check the account agreement, investments, income and applicable reporting rules before deciding how to report a TFSA. This guide does not determine that every TFSA requires Forms 3520 and 3520-A, or promise that a proposed RBT election would remove all obligations.
Check your Canadian contribution room separately. Do not make contributions based on an assumed future US exemption.
Sources: CRA TFSA arrangements and contribution information; IRS rules for US citizens and resident aliens abroad. Read September 24, 2026.
FBAR and Form 8938: current duties versus proposed relief
FinCEN requires an FBAR from a US person with a financial interest in or signature authority over foreign financial accounts when their combined value exceeds US$10,000 at any time during the calendar year, subject to applicable exceptions. The test is aggregate, not per account.
Form 8938 is a separate filing requirement with different covered assets and thresholds. For individuals qualifying as living abroad, thresholds are above US$200,000 at year-end or US$300,000 at any time for unmarried or married-separate filers, and above US$400,000 or US$600,000 respectively for joint filers. Check the form instructions for the living-abroad conditions and other exceptions.
In the introduced H.R. 10468, proposed section 899(b)(6) provides specified reporting exemptions for electing individuals, and section 899B addresses certificates of nonresidency. These proposed provisions are not a current filing exemption. Do not stop account reporting based on this bill description.
Sources: FinCEN FBAR filing requirement; IRS comparison of FBAR and Form 8938; introduced H.R. 10468, sections 899 and 899B. Read September 24, 2026.
Who is covered by the introduced proposal?
Proposed section 899 addresses an election by a US citizen, foreign tax residency and modified US residency rules. It includes a special rule for citizens born abroad and an exclusion for federal employees. The ordinary election requirements include preceding-five-year tax compliance certification and payment or deferral of any section 899A tax, subject to transition provisions.
Section 899A(g) describes separate transition routes. One combines ordinary foreign residence at the introduction date, the specified US nonresidence history and three-year tax compliance certification. Another uses the period beginning on the later of the individual’s 25th birthday or March 18, 2010 through enactment. Read the exact statutory definitions and conditions; labels such as “accidental American” or “digital nomad” do not establish an exemption by themselves.
The bill also addresses termination and short-term nonresidency. This is a description of introduced language, not an eligibility determination or an available election.
Source: H.R. 10468 as introduced, proposed sections 899 and 899A(g), read September 24, 2026.
How the proposed departure tax is structured
Proposed section 899A defines a specified electing individual by reference to net worth exceeding the estate-tax basic exclusion amount in effect on the election date. It does not set a permanent US$13.99 million threshold.
The deemed-sale rule is subject to listed property exceptions and transition rules. These include specified deferred compensation, retirement and tax-deferred accounts, nongrantor-trust interests and US real property. Foreign real property has an ownership-and-principal-residence use condition: at least two years within the five-year period ending on the election date.
The introduced text does not provide the previously stated US$890,000 gains exclusion. Do not import an expatriation-tax exclusion into this different proposal or assume all assets of someone described as an accidental American are exempt.
Source: H.R. 10468 as introduced, proposed section 899A, read September 24, 2026.
US income still needs a separate analysis
The proposal should not be read as a promise of zero US tax. Under existing nonresident-alien rules, the IRS distinguishes income effectively connected with a US trade or business from certain US-source fixed or determinable income. Filing duties can depend on business activity, withholding and claims for refunds or benefits.
Income classification and applicable treaty provisions matter. Do not apply a single rate to dividends, interest, pensions, Social Security and rental income, or assume that receiving US-source income always produces the same return requirement. This article does not determine a reader’s treaty entitlement.
Source: IRS taxation of nonresident aliens, read September 24, 2026. This explains the existing framework, not a currently available RBT election.
Self-employment in Canada: current coverage and income sourcing
The foreign earned income exclusion does not remove earnings from the US self-employment tax calculation. The IRS explains that a totalization agreement may instead establish exemption from US self-employment tax when earnings are covered only by the other country’s system.
Under the US-Canada agreement, self-employed workers residing in Canada are assigned Canadian or Quebec coverage. Request the appropriate certificate of coverage and attach a copy to the US return each year as evidence of the exemption.
For personal services, income sourcing generally follows where the work is performed. A US client or payment into a US account does not, by itself, make services performed in Canada US-source income. Work performed in more than one country may require allocation.
Do not treat a proposed RBT election as a substitute for establishing your current coverage and reporting obligations.
Sources: IRS self-employment tax for businesses abroad; SSA agreement with Canada; IRS earned-income sourcing rules. Read September 24, 2026.
RBT proposals and citizenship renunciation are different decisions
Do not use predicted RBT passage as a recommendation to begin, delay or complete renunciation. The IRS describes relinquishing citizenship and its tax consequences as serious matters involving irrevocable decisions and recommends considering legal counsel.
US tax compliance is not a precondition to relinquishing citizenship under the Immigration and Nationality Act, but expatriation can create separate tax obligations. Certain former citizens may qualify for IRS relief procedures only if all eligibility requirements are met.
Source: IRS relief procedures for certain former citizens, read September 24, 2026. For the nationality process, consult the Department of State’s relinquishment guidance.
Keep enacted tax changes separate from RBT proposals
Use the IRS’s guidance on enacted tax changes to check each provision and its effective year. The IRS’s guidance for US citizens and resident aliens abroad continues to describe worldwide-income taxation and existing relief mechanisms.
Do not treat changes to an unrelated deduction, credit or reporting threshold as permission to stop filing under a proposed RBT system.
Sources read September 24, 2026.
Foreign trusts: assess ownership, transactions and reporting separately
US tax consequences depend on whether a person is treated as a trust owner, beneficiary or transferor. The IRS identifies different rules for trust income, distributions and transfers; a foreign trustee or foreign assets alone are not a complete filing analysis.
Forms 3520 and 3520-A may apply to reportable transactions and US ownership, subject to exceptions. The IRS identifies an exception for RRSPs and RRIFs and conditional relief for certain other tax-favored foreign trusts. Applicable FBAR and Form 8938 obligations must still be checked separately.
This article does not establish a trust’s classification or promise that proposed RBT changes would eliminate its reporting, tax or professional fees. Review the arrangement and applicable rules before changing filings or restructuring assets.
Source: IRS foreign-trust reporting guidance, read September 24, 2026.
What to review before changing your filings
Review current filing requirements using your citizenship, residence, income and account records. Do not stop required filings or change investments based on predicted legislation.
If past offshore reporting failures may have been non-willful, review the Streamlined procedures’ general and residence-specific eligibility rules. An IRS civil examination or criminal investigation makes a taxpayer ineligible; relief is not a universal penalty waiver.
For help preparing that review, see our Streamlined filing eligibility and submission guide.
Keep prior returns, account statements, residence dates and IRS correspondence available. Any consultation should establish the questions requiring review and the scope of paid work; it cannot guarantee a tax result or eligibility for a future election.
Book a consultation to discuss your filing questions.
Sources: IRS guidance for Americans abroad; IRS Streamlined eligibility rules. Read September 24, 2026.
Frequently asked questions
What is the Residence-Based Taxation bill?
H.R. 10468, introduced in the 118th Congress, proposes an elective residency-based income-tax framework for US citizens abroad, subject to specified conditions. This guide discusses that introduced version; its provisions do not themselves authorize a change to current filings.
Has the RBT bill passed?
The record examined here identifies H.R. 10468 as an introduced bill in the 118th Congress, referred to House Ways and Means on December 18, 2024. That record is not evidence of enacted relief or the status of a later proposal. Check any successor bill’s own text and legislative actions before relying on a claimed change.
What would happen to my TFSA if RBT passes?
Do not assume a future exemption. TFSA arrangements can have different legal forms; review the account agreement, investments and applicable US tax and reporting rules. This guide does not establish that every TFSA is a foreign trust or that proposed RBT changes would remove every obligation.
What would happen to my RRSP if RBT passes?
Do not assume proposed RBT rules determine your current RRSP treatment. Revenue Procedure 2014-55 already provides automatic treaty deferral for eligible individuals, while applicable FBAR and Form 8938 reporting and taxation of distributions remain. Review eligibility and filing history before changing your reporting.
Would I still need to file FBAR if RBT passes?
The introduced bill proposes reporting exemptions for electing individuals, but proposed language is not a current exemption. Assess your existing FBAR obligation separately from Form 8938 and continue any required filings.
Who qualifies for the RBT election?
The introduced proposal contains election, foreign tax residency, modified US residency, compliance and transition conditions, plus a federal-employee exclusion and a special rule for citizens born abroad. It is not an available election or a determination that any reader qualifies.
Is there a departure tax under the RBT bill?
Yes. Proposed section 899A applies a deemed-sale regime to specified electing individuals, with property exceptions and transition rules. The net-worth threshold references the estate-tax basic exclusion amount in effect at election; the introduced text does not provide an $890,000 gains exclusion.
Should I stop filing US tax returns now?
Do not stop required filings based on a legislative proposal. Review your existing obligations and any applicable relief under current IRS rules; a proposed election does not establish your eligibility for future relief.
Would I still owe US tax on anything under RBT?
Do not assume zero US tax. The proposed framework requires separate analysis of income and treaty treatment. Under existing nonresident rules, business-connected income, other covered US-source income, withholding and filing requirements are treated differently.
Do enacted tax changes replace the filing rules described here?
Check each enacted provision and its effective year separately. IRS guidance for Americans abroad continues to describe worldwide-income taxation and existing relief; changes to deductions or credits should not be treated as an RBT filing exemption.
Which RBT bill version does this guide examine?
This guide examines H.R. 10468 as introduced in the 118th Congress on December 18, 2024. It does not establish a count of all RBT proposals or the legislative status of any successor bill.
What happens to accidental Americans under the RBT bill?
The introduced bill includes special and transition rules using citizenship, residence history and other statutory conditions. The label “accidental American” alone does not establish an exemption or determine whether a particular person would qualify.
Will I still need to file FBAR and FATCA forms during the transition?
Do not assume a transition exemption from an introduced bill. Check existing FBAR and Form 8938 requirements separately and continue required reporting unless an applicable rule changes your obligation.
Will I lose my US citizenship under RBT?
The introduced proposal addresses tax treatment without requiring citizenship renunciation. That does not make a proposed election equivalent to renunciation or establish that it is available, free or without other consequences.
How are US Social Security benefits treated for Canadian residents under existing rules?
IRS Publication 597 explains that US Social Security benefits paid to a Canadian resident are taxed in Canada as Canadian Pension Plan benefits, with 15% of the benefit exempt from Canadian tax. That is not a 15% US withholding rate. Check treaty residence and the applicable reporting rules; do not infer treatment from proposed RBT changes.
Would I still need to file FBAR under RBT?
Proposed section 899(b)(6) of the introduced bill addresses FBAR reporting for electing individuals. Do not rely on that proposal to stop current filings; eligibility and effective rules would need to be established under enacted law.
What is the departure tax under the RBT bill?
Proposed section 899A generally treats covered property of specified electing individuals as sold before the election date. Its threshold, property exceptions and transition rules must be read together; it is distinct from the existing expatriation-tax regime.
Can I qualify for RBT if I have unfiled US tax returns?
The ordinary proposed election includes preceding-five-year compliance certification, with specific transition provisions. Unfiled returns require a separate current-law review; this introduced bill does not itself provide a catch-up procedure or establish your eligibility.
Does RBT apply to US citizens married to Canadians?
Marriage to a Canadian does not by itself establish eligibility under the introduced proposal. Its election, residency, compliance and transition provisions must be assessed individually.
What happens to my RRSP and TFSA under residence-based taxation?
Review current rules separately for each account. Eligible RRSP holders already have treaty-deferral treatment under Revenue Procedure 2014-55, with applicable reporting and distribution rules remaining. A TFSA’s terms and investments need their own analysis; this guide does not promise that proposed RBT changes eliminate all cross-border obligations.
How is self-employment income treated under the RBT bill?
Do not assume a proposed RBT election removes your current self-employment obligations. The foreign earned income exclusion does not remove earnings from the US self-employment tax calculation. Coverage under the US-Canada totalization agreement and the appropriate certificate must be considered separately. For personal services, income sourcing generally follows where work is performed, rather than the client’s location.
What are the arguments against residence-based taxation?
This guide does not attribute objections, revenue estimates or legislative positions to named officials without a supporting primary source. When evaluating a proposal, distinguish its actual text from commentary about cost or the likelihood of passage.
When will the RBT bill become law?
This guide does not establish a passage date. The introduced-bill record and the sponsor’s announcement are not guarantees that a proposal will become law. Do not change current filing obligations based on a forecast.
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