Am I exempt from FATCA reporting? FATCA exemption codes and requirements in 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
| Who files | Who does not file | |
|---|---|---|
| Status | US citizens, resident aliens, and specified domestic entities required to file a US return | Nonresident aliens with no US filing obligation, or those who elect not to file jointly with a US spouse |
| Asset value | Specified foreign financial assets above the threshold for your filing status and residency | Assets below the threshold – $50,000/$200,000 year-end for single filers, depending on residency |
| Asset type | Foreign bank accounts, securities, entity interests, foreign insurance with cash value, foreign pensions | US branch accounts of foreign banks, directly held real estate, foreign currency, foreign social security benefits |
| Deadline | April 15, 2026 for tax year 2025 – automatic extension to June 15, 2026 for expats abroad | No form required if none of the three conditions are met |
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 was signed into law in 2010 as part of the HIRE Act. Its core purpose: reduce offshore tax evasion by US persons.
FATCA operates on two tracks. The first requires foreign financial institutions worldwide to identify and report accounts held by US persons to the IRS. The second – and the one that matters for individual expats – requires US taxpayers to disclose specified foreign financial assets on IRS Form 8938, the individual FATCA reporting form, when those assets exceed certain dollar thresholds.
Three concepts are worth separating at the outset:
- FATCA as a compliance regime – the broad international framework that governs how foreign banks report US-held accounts to the IRS.
- Form 8938 as a personal filing obligation – the form you attach to your income tax return if your foreign financial assets exceed the threshold.
- FBAR as a separate requirement – FinCEN Form 114 is filed directly with FinCEN, not the IRS, and uses different thresholds.
The bottom line: FATCA is the law. Form 8938 is how you comply with the individual reporting side of that law.
Three things that determine whether you file
Your FATCA filing obligation depends on:
- Filing status and residency. You must be a specified individual – a US citizen, resident alien, or nonresident alien electing to file jointly.
- Asset value. The aggregate value of your specified foreign financial assets must exceed the threshold for your category.
- Return requirement. You must be otherwise required to file a US income tax return for the year. If not, Form 8938 is not required – even if your assets exceed the threshold.
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.
| Asset type | Reportable on Form 8938? | Common example |
|---|---|---|
| Foreign bank accounts | Yes | Checking or savings account at a bank outside the US |
| Foreign brokerage accounts | Yes | Investment account with a non-US broker |
| Foreign stocks and securities held outside a US account | Yes | Shares in a foreign corporation held directly |
| Interest in a foreign entity | Yes | Ownership stake in a foreign partnership or LLC |
| Foreign-issued life insurance or annuity with cash value | Yes | Whole life policy issued by a non-US insurer |
| Foreign pension or retirement account | Yes, in most cases | Employer pension in the UK, Australia, or similar |
| Directly held foreign real estate | No | Apartment you own abroad in your personal name |
| Foreign real estate held through a foreign entity | Yes – the entity interest is reportable | Property owned via a foreign LLC or corporation |
| Foreign currency held directly | No | Euros in a safe at home |
| Social security-type benefits from a foreign government | No | UK State Pension, German Rentenversicherung |
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:
- 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.
- You are required to file a US federal income tax return for the tax year.
- 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.
| Filing status | US residents – year-end | US residents – any point during year | Expats abroad – year-end | Expats abroad – any point during year |
|---|---|---|---|---|
| Single or married filing separately | $50,000 | $75,000 | $200,000 | $300,000 |
| Married filing jointly | $100,000 | $150,000 | $400,000 | $600,000 |
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.
Who is exempt from FATCA reporting?
The word “exempt” gets used loosely in this context, and that causes confusion. There are three distinct situations where you do not file Form 8938:
1. You are not required to file a US income tax return.
If you have no US filing obligation for the year, you do not need to file Form 8938 – regardless of how much you hold abroad. This applies to some nonresident aliens and to US persons whose income falls below the standard filing thresholds.
2. Your specified foreign financial assets are below the applicable threshold.
This is the most common scenario. You hold foreign assets, but the aggregate value never crosses the $50,000/$200,000 line for your category. You are not “exempt” from FATCA in a legal sense – you are simply below the reporting trigger.
3. The assets you hold are excluded from Form 8938.
Certain foreign assets are specifically excluded from the definition of “specified foreign financial assets.” If all of your foreign holdings fall into excluded categories, you have no Form 8938 obligation even if their total value is substantial.
Understanding which category applies to you matters, because each one carries different implications for future years. There are no blanket exemptions from FATCA reporting for US citizens or resident aliens – the obligation turns on asset type, value, and filing status.
Being below the threshold this year does not guarantee the same result next year if asset values change.
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:
| Asset type | Report on Form 8938? | Why it is excluded |
|---|---|---|
| US branch accounts of foreign banks | No | Treated as held by a US financial institution |
| Foreign branches of US financial institutions | No | The branch is part of a US-regulated institution – a separately incorporated foreign subsidiary does not qualify for this exclusion |
| Social security-type benefits from foreign governments | No | Not a financial account or investment asset |
| Interests in foreign trusts or estates already reported on Form 3520 | Identify on Part IV, but no duplicate reporting | Value still counts toward the threshold |
| Foreign holdings reported on Form 8621, 5471, or 8865 | Identify on Part IV, but no duplicate reporting | Value still counts toward the threshold |
| Directly held foreign real estate | No | Not a financial asset – unless held via a foreign entity |
| Foreign currency held directly | No | Not a specified foreign financial asset |
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.
FATCA exemption codes on Form W-9: What they mean – and when they do not apply
If you have filled out a Form W-9, you may have noticed a field labeled “Exemption from FATCA reporting code.” This is one of the most misunderstood parts of the form.
The FATCA codes on Form W-9 – labeled A through M – are payee exemption codes for entities, not for individual taxpayers.
They tell the financial institution that the entity receiving payment is exempt from FATCA withholding and reporting because it falls into a specific IRS-defined category.
Here is the complete FATCA code list:
| Code | Exempt entity type |
|---|---|
| A | Tax-exempt organization under IRC §501(a), or any individual retirement plan |
| B | The United States, or any US agency or instrumentality |
| C | A state, the District of Columbia, a US territory, or their political subdivisions |
| D | Corporation whose stock is regularly traded on an established securities market |
| E | Corporation in the same expanded affiliated group as a Code D corporation |
| F | Securities, commodities, or derivatives dealer registered under US or state law |
| G | Real estate investment trust |
| H | Regulated investment company or entity registered under the Investment Company Act |
| I | Common trust fund |
| J | Bank as defined in IRC §581 |
| K | Broker |
| L | Trust exempt under IRC §664 or described in IRC §4947 |
| M | Tax-exempt trust under a §403(b) or §457(g) plan |
If you are an individual US expat, these codes do not apply to you. Individual taxpayers are not FATCA exempt parties under the W-9 framework – these codes exist for institutions and entities that are already subject to their own reporting regimes.
When a bank or financial institution asks you to complete a W-9 and you see the FATCA reporting exemption code field, leave it blank. Entering a code you are not entitled to use does not exempt you from Form 8938 filing – it simply means you filled out the W-9 incorrectly.
Backup withholding exemptions for 1099-MISC and other 1099 forms run through the Exempt payee code field on the same form – a separate concept from FATCA exemption codes. Do not confuse the two.
Banks outside the US sometimes ask US account holders to complete a W-9 as part of their own FATCA compliance – even though it is a US domestic document.
The correct response depends on whether the bank needs the form for FATCA withholding or for US payment reporting.
Missed FATCA reporting? Here’s what to do
If you have held foreign financial assets above the threshold and did not file Form 8938, you are not alone. Many US expats discover this obligation years after moving abroad.
The key is to act before the IRS contacts you. Voluntary disclosure carries far fewer consequences than waiting for an IRS notice.
Step 1 – Confirm whether Form 8938 was actually required
Review your foreign asset values for each open tax year. If the aggregate value of your specified foreign financial assets stayed below the threshold for your filing status and residency in a given year, you did not owe a Form 8938 for that year.
Step 2 – Gather account statements and valuations
Collect year-end statements and any records showing the highest balance during the year for each foreign financial account. For non-account assets – foreign stocks, entity interests, insurance policies – you will need fair market value documentation.
Step 3 – Determine whether your failure was non-willful
Non-willful means you were unaware of the obligation or made an honest mistake.
This distinction matters because the streamlined filing compliance procedures – the most common correction path for expats – require a certification of non-willful conduct.
Step 4 – Choose the right compliance path
Several IRS programs exist depending on your situation. The streamlined procedures are the most common, but delinquent return procedures and other options may apply. A tax professional can help you determine which path fits.
FATCA penalties for non-compliance – Form 8938
The penalty structure under IRC §6038D is tiered:
| Violation | Penalty |
|---|---|
| Failure to file Form 8938 | $10,000 per return |
| Continued failure after IRS notification | Additional $10,000 for each 30-day period of non-compliance, up to $50,000 in additional penalties |
| Understatement of tax attributable to undisclosed foreign assets | 40% accuracy-related penalty on the underpayment |
| Fraud | 75% of the underpayment |
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.
| FBAR – FinCEN Form 114 | FATCA – Form 8938 | |
|---|---|---|
| Governing law | Bank Secrecy Act | Foreign Account Tax Compliance Act – IRC §6038D |
| Threshold | $10,000 aggregate at any point during the year | $50,000–$600,000, depending on filing status and residency |
| What is reported | Foreign financial accounts – bank, securities, mutual fund, and other financial accounts | Specified foreign financial assets – accounts plus stocks, entity interests, instruments, and insurance |
| Filed with | FinCEN – filed electronically, separate from your tax return | IRS – attached to your annual income tax return |
| Deadline for tax year 2025 | April 15, 2026 – automatic extension to October 15, 2026 | April 15, 2026 – follows your tax return extension |
| Penalty for non-filing | Up to $16,536 per violation for non-willful failures (2025) | $10,000 per return, plus continuation penalties up to $50,000 |
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.
Frequently asked questions
Living abroad does not make you exempt. It raises your filing threshold.
Single expats must file Form 8938 once specified foreign financial assets exceed $200,000 at year-end or $300,000 at any point during the year (2025). Married filing jointly, the thresholds are $400,000 and $600,000.
If your assets stay below those levels, you do not file – but that is a threshold issue, not an exemption.
It can refer to three different things. First, certain asset types – like US branch accounts at foreign banks – are structurally excluded from Form 8938.
Second, some entities qualify for exemption via W-9 codes A through M. Third, taxpayers below the filing threshold are sometimes described as “exempt,” though the IRS does not use that term for individuals who simply fall below the dollar threshold.
A FATCA exemption code is a one-letter code on Form W-9 that identifies entities exempt from FATCA withholding. The codes run from A to M and cover categories like tax-exempt organizations, government entities, and regulated investment companies.
Individual US taxpayers do not use these codes.
No. FATCA applies to US citizens, green card holders, and resident aliens. It also applies to nonresident aliens who elect to file a joint return with a US citizen or resident alien spouse. Foreign financial institutions have separate FATCA obligations on the institutional side.
Yes. If you are a specified individual, file a US tax return, and hold specified foreign financial assets above the applicable threshold, filing Form 8938 is mandatory. There is no opt-out.
FATCA filing is the process of reporting your specified foreign financial assets to the IRS as required by the Foreign Account Tax Compliance Act. You do this by attaching FATCA Form 8938 – officially titled Statement of Specified Foreign Financial Assets – to your annual income tax return. The form lists each foreign account, its maximum value during the year, and the institution that holds it. FATCA filing is separate from the FBAR, which goes to FinCEN – you may owe both.
Form 8938 is due with your income tax return. For tax year 2025, that means April 15, 2026. Expats living abroad get an automatic extension to June 15, 2026. Filing Form 4868 extends the deadline to October 15, 2026.
No. Unlike some other international information returns, there is no requirement to file Form 8938 if your specified foreign financial assets do not exceed the reporting threshold. If the form is not required, do not file it.
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