Who is exempt from FATCA reporting? FATCA exemptions, thresholds, and exemption codes (2026)

Most US expats who ask whether they are exempt from FATCA reporting are not actually exempt – they are simply below the Form 8938 filing threshold.

That distinction matters, because a threshold can be crossed next year while a true exemption cannot.

A true FATCA exemption applies when the asset itself is outside the scope of Form 8938 – for example, an account held at a US branch of a foreign bank.

Being below the dollar threshold is a different situation: you have reportable assets, but their aggregate value is not high enough to trigger filing this year.

At a glance

 

Example: Sarah, a US citizen, has lived in Germany for six years. She has a German checking account worth $35,000 and a German employer pension valued at $180,000. She files as single. Because the combined value of her specified foreign financial assets is $215,000 – above the $200,000 year-end threshold for single expats abroad – she must file Form 8938. The fact that she has lived abroad for years does not exempt her. If she assumed the pension “doesn’t count,” she would be wrong – foreign pensions are reportable assets under FATCA.

This FATCA reporting guide walks through the filing thresholds for US residents and expats, clarifies the W-9 FATCA exemption codes that cause frequent confusion, and outlines what to do if you have missed a filing.

What is FATCA, and what are the FATCA reporting requirements?

The Foreign Account Tax Compliance Act (FATCA) is a 2010 US law designed to curb offshore tax evasion. It works on two tracks. Foreign financial institutions must identify accounts held by US persons and report them to the IRS. US taxpayers must report specified foreign financial assets on Form 8938 once their value exceeds a threshold – that is the individual FATCA reporting requirement this guide covers.

FATCA is separate from the FBAR (FinCEN Form 114), which is filed with FinCEN under the Bank Secrecy Act and uses a $10,000 threshold. You may owe both for the same accounts.

In short: FATCA is the law. Form 8938 is how an individual complies with it.

What financial accounts and assets are reportable under FATCA?

Not every foreign asset triggers a Form 8938 obligation. The IRS defines “specified foreign financial assets” as foreign financial accounts and certain foreign non-account investment assets.

 

The critical distinction: the IRS cares about financial assets held through foreign financial institutions or foreign entities. Tangible property you own directly – real estate, art, a car – is not a specified foreign financial asset, even if it is located abroad.

Aggregate value matters. You add up all your specified foreign financial assets to determine whether you cross the threshold. A single account below the threshold can still trigger a filing requirement when combined with other assets.

FATCA filing requirements: Who needs to file Form 8938?

The FATCA requirements for individuals come down to three conditions. You must file Form 8938 if you meet all three:

1. You are a “specified individual” – a US citizen, US resident alien, or a nonresident alien who elects to file a joint return with a US spouse.
2. You are required to file a US federal income tax return for the tax year.
3. The total value of your specified foreign financial assets exceeds the reporting threshold for your filing status and residency.

If any one of these conditions is not met, Form 8938 is not required. The most common reason expats fall outside the requirement is simply that their assets stay below the threshold.

FATCA filing thresholds at a glance

The thresholds depend on two variables: where you live and how you file.

 

These dollar amounts are the same for tax year 2025 as in prior years – Congress has not indexed them for inflation.

You trigger the filing requirement if you exceed either the year-end value or the any-point-during-the-year value. You do not need to exceed both.

FATCA filing thresholds for US residents

If you live in the United States, the thresholds are relatively low. A single filer must report on Form 8938 once specified foreign financial 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, those figures double to $100,000 at year-end and $150,000 at any time during the year.

Married filing separately uses the single-filer thresholds – $50,000 and $75,000 – because each spouse files a separate Form 8938.

Choosing between MFJ and MFS with a nonresident alien spouse directly affects which Form 8938 threshold applies – and can determine whether the form is required at all.

Filing thresholds for US expats living abroad

If your tax home is in a foreign country and you qualify under either the bona fide residence test or the physical presence test, you get significantly higher Form 8938 filing thresholds.

A single expat abroad files Form 8938 only when specified foreign financial assets exceed $200,000 at year-end or $300,000 at any point during the year.

For married expats filing jointly, the thresholds rise to $400,000 at year-end and $600,000 at any time during the year.

The higher thresholds exist because expats are more likely to hold routine financial assets – checking accounts, local pensions, investment accounts – in the country where they live.

Without elevated thresholds, nearly every expat would trigger the filing requirement for ordinary day-to-day accounts.

Even with the higher Form 8938 thresholds, you could still owe an FBAR if the aggregate value of your foreign financial accounts exceeds $10,000 at any point during the year.

The two forms operate independently.

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Who is exempt from FATCA reporting?

You are exempt from FATCA reporting on Form 8938 if you are not required to file a US tax return, if you are not a "specified individual" (most nonresident aliens), or if every foreign asset you hold is excluded from the definition of specified foreign financial assets. Being below the dollar threshold is not an exemption – it only means no filing is due this year. There are no blanket FATCA exemptions for US citizens, green card holders, or resident aliens based on age, income level, or years lived abroad.

Six situations where no Form 8938 is required:

1. No US tax return is required. If your income is below the filing threshold for your status, Form 8938 is not required – regardless of how much you hold abroad. The obligation attaches to the return, not to the assets.
2. You are not a specified individual. FATCA individual reporting applies to US citizens, green card holders, and resident aliens. A nonresident alien is outside Form 8938 unless they elect to file a joint return with a US citizen or resident spouse. FATCA is not only for US citizens – a green card holder living abroad is covered exactly like a citizen.
3. Your specified foreign financial assets are below the threshold. The most common scenario. You hold reportable assets, but their aggregate value never crosses the $50,000/$200,000 line for your category. This is a threshold outcome, not a legal exemption – the result can change next year.
4. Every asset you hold is an excluded type. Directly held foreign real estate, foreign currency held personally, foreign social security-type benefits, and accounts at a US branch of a foreign bank are not specified foreign financial assets. If these are your only foreign holdings, there is nothing to report – whatever their value. The full list is in the table below.
5. The asset is already reported on another international form. Interests reported on Forms 3520, 3520-A, 5471, 8621, or 8865 are not listed again on Form 8938 – you identify the other form in Part IV instead. Their value still counts toward the threshold.
6. The account holder is an exempt entity, not an individual. Entities that fall under the W-9 FATCA exemption codes A–M, and "exempt beneficial owners" such as foreign governments, central banks, and certain retirement funds, are exempt on the institutional side of FATCA. These exemptions never transfer to an individual customer of that institution.

If none of the six applies and your assets exceed the threshold, Form 8938 is mandatory – there is no opt-out and no exemption application.

FATCA exemption checklist

Use this quick self-assessment to determine whether Form 8938 applies to you for tax year 2025:

• Are you a US citizen, green card holder, or resident alien? If no – Form 8938 generally does not apply unless you elect to file jointly with a US spouse.
• Are you required to file a US federal income tax return? If no – Form 8938 is not required, even if your foreign assets exceed the threshold.
• Do you hold any specified foreign financial assets? Foreign bank accounts, investment accounts, foreign stocks, foreign entity interests, or foreign insurance policies with cash value? If no – nothing to report.
• Does the aggregate value of those assets exceed your threshold? Check the table above for your filing status and residency. If no – no Form 8938 required.

If you answered yes to all four, you need to file Form 8938 with your tax return.

FATCA-exempt financial assets

These asset categories are excluded from Form 8938 – they are not “specified foreign financial assets” under the IRS definition:

 

One detail catches people off guard: assets reported on other international information returns – Forms 3520, 5471, 8621, 8865 – are not separately reported on Form 8938, but their value still counts when you calculate whether you exceed the filing threshold.

Is there a FATCA exemption – or are you simply below the threshold?

These two concepts are different, and confusing them can lead to mistakes in future years.

A genuine FATCA exemption means the asset type itself is outside the scope of Form 8938. US branch accounts of foreign banks, for example, are structurally FATCA exempt – it does not matter how large the balance is.

Being below the threshold is not an exemption. If your foreign account balances grow, or you acquire new foreign assets, you may cross the threshold next year and owe a filing. Treating a low balance as a permanent exemption is how taxpayers end up with delinquent filings.

Exempt beneficial owners and FATCA-exempt institutions: why your bank's status does not exempt you

FATCA has a second set of exemptions that applies to institutions, not to taxpayers. Under Treasury Regulations §1.1471-6 and Annex II of the intergovernmental agreements (IGAs), certain foreign entities are "exempt beneficial owners" or non-reporting financial institutions. They are exempt from FATCA withholding and from reporting their account holders to the IRS.

The main FATCA-exempt parties on the institutional side are:

• Foreign governments, their political subdivisions, and wholly owned agencies
• International organizations such as the UN, the IMF, and the World Bank
• Foreign central banks of issue
• Governments of US territories
• Certain foreign retirement funds – treaty-qualified funds, broad-participation and narrow-participation funds, and funds formed under a plan similar to a US §401(a) plan
• Entities wholly owned by one or more exempt beneficial owners
• Non-reporting financial institutions listed in a country's IGA Annex II – for example, small local banks or credit unions with a predominantly domestic client base

None of these exemptions passes through to an individual customer. The table shows how the two sides interact:

In practice, the institutional exemptions matter for one reason only: a foreign bank, pension fund, or government entity that is FATCA-exempt will not ask you for a W-9 and will not report you to the IRS. Your own Form 8938 and FBAR obligations are unchanged – they depend on what you hold and its value, not on who holds it.

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FATCA exemption codes on Form W-9: which entities qualify (codes A–M)

The "Exemption from FATCA reporting code" field on Form W-9 lists 13 codes, A through M. Each code identifies a category of entity that is exempt from FATCA reporting because it is already subject to its own US regulatory or tax-reporting regime. The codes are for entities only – an individual US taxpayer, including an expat with a personal foreign bank account, does not qualify for any of them and leaves the field blank.

Here is the complete FATCA exemption code list with the eligibility test for each:

Source: IRS Instructions for the Requester of Form W-9 and Form W-9 (Rev. March 2024).

If you are an individual US expat, none of these categories applies to you. Individuals are not FATCA exempt parties under the W-9 framework, and entering a code you are not entitled to use does not exempt you from Form 8938 – it only means the W-9 was completed incorrectly.

An entity's exemption under codes A–M applies to the entity's own account documentation. It does not extend to the entity's owners, employees, or customers, and it has no effect on whether an individual must file Form 8938.

For line-by-line instructions on completing Form W-9 when a foreign bank requests it – including the separate Exempt payee code field used for backup withholding – see our FATCA W-9 guide.

FATCA penalties for non-compliance – Form 8938

The penalty structure under IRC §6038D is tiered:

 

The maximum exposure from the filing penalty alone is $60,000 per return – $10,000 initial plus up to $50,000 in continuation penalties.

These penalties apply per return, per year. Multiple years of non-filing can compound quickly.

A reasonable cause defense is available under IRC §6038D. If you can demonstrate that your failure to file was due to reasonable cause and not willful neglect, the IRS may waive the penalty.

The burden of proof is on the taxpayer.

Options for late filers: Streamlined procedures and next steps

The IRS offers several paths for taxpayers who need to catch up on Form 8938 and other international information returns. The most common programs for expats with exempted FATCA documents – meaning returns and forms that should have been filed – are:

1. Streamlined Foreign Offshore Procedures – for expats living abroad

You file amended or delinquent returns for the three most recent tax years and six most recent FBARs. No penalty applies if you certify that your failure was non-willful.

To qualify for the Streamlined Foreign Offshore Procedures, you must meet the IRS non-residency test: in at least one of the three most recent tax years for which the filing deadline has passed, you had no US abode and were physically outside the United States for at least 330 full days.

2. Streamlined Domestic Offshore Procedures – for US residents

Same scope – three years of returns, six years of FBARs – but a 5% miscellaneous offshore penalty applies, calculated on the highest aggregate balance of undisclosed foreign financial assets during the compliance period.

The Streamlined Domestic Offshore Procedures are the standard path for US-resident taxpayers whose non-compliance was not willful.

3. Delinquent FBAR submission procedures

If you missed only the FBAR – not the tax return – and the IRS has not contacted you, filing the delinquent FBARs with an explanatory statement has historically avoided a penalty.

As of July 2026, the IRS removed the public webpage confirming this no-penalty treatment. The delinquent FBAR submission procedures are still described in IRS internal guidance (IRM 4.26.16.3.11), but no IRS.gov page currently confirms the penalty outcome.

4. Delinquent international information return submission procedures

For other international forms – including Form 8938, Form 5471, Form 8865 – filed late with reasonable cause.

The delinquent international information return procedures may waive penalties if you attach a reasonable cause statement explaining why the forms were filed late.

FATCA vs. FBAR: Key differences

Both FATCA and FBAR require reporting of foreign financial assets, but they are separate obligations with different rules. The distinction trips up many expats because the two forms can overlap – you may need to report the same account on both.

 

You can owe both forms for the same accounts. A foreign bank account worth $250,000 held by a single expat abroad triggers the FBAR – because it exceeds $10,000 – and Form 8938, because it exceeds the $200,000 year-end threshold for single filers abroad.

The FBAR vs FATCA distinction matters most when an account falls above the $10,000 FBAR threshold but below the Form 8938 threshold – you still owe FinCEN a filing even though FATCA does not require one.

The FBAR vs Form 8938 overlap is especially common for expats with foreign pensions or brokerage accounts that count toward both forms.

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