Love knows no boundaries and neither do the U.S. tax rules. Marrying a U.S. citizen will result in U.S. tax implications for the couple that should not be ignored. This article will review a few U.S. tax considerations for married couples (that include a U.S. citizen).

Proper Tax Filing

Contrary to Canada, the U.S. tax filing requires an individual taxpayer to file their tax return as “single” or “married filing jointly” (“MFJ”) or “married filing separately” (“MFS”) or head of household. For U.S. taxpayers, there are some benefits to filing MFJ such as larger standard deductions and qualifying for various tax credits, but can the U.S. citizen “choose” to file as single or MFJ?

When legally married, the U.S. citizen must file either MFJ or MFS. If, however, the couple opts to file MFJ, the spouse who is not a U.S. person (neither a U.S. citizen nor a U.S. resident) must file a specific election (commonly referred as a “6013(g) election”). Such form treats the non-U.S. spouse as a “resident” for certain U.S. tax provisions.[1]

Proper Reporting

It is common for a couple to hold assets jointly, notably their principal residence, bank accounts, and investments accounts. The U.S. spouse has an obligation under the Foreign Account Tax Compliance Act and FinCEN Form 114 (commonly referred to as “FBAR”) requirements to disclose all foreign financial assets and accounts that exceed a specific threshold.[2]

Many non-U.S. spouses are not thrilled to have their personal financial information disclosed to the Internal Revenue Service. However, there are non-tax benefits in holding property jointly between spouses and these may exceed the complex issue of U.S. reporting.

Don’t Forget About Gift Tax

One issue that is often overlooked is the U.S. gift tax; which is a transfer tax, not an income tax. Therefore, U.S. citizens must be mindful as any gift exceeding a specific threshold will be subject to the U.S. gift tax, which is levied against the donor of the gift.

For 2026, if the U.S. spouse makes a gift to their non-U.S. spouse in excess of US$194,000 or makes a gift in excess of US$19,000 to anyone else (a child as an example), there is an obligation to file Form 709.

The couple’s estate planning will also need to consider the U.S. estate tax as part of their Canadian estate planning.

What About a Divorce?

The statistics indicate that approximately forty percent (40%) of marriages end in divorce. How often are the U.S. tax implications considered in a divorce involving a U.S. citizen? Indeed, the U.S. tax rules concerning divorces apply to U.S. couples thus, when a spouse is a non-U.S. person (neither a U.S. citizen nor U.S. resident), many of the tax-free transfers rules under U.S. tax laws are not applicable. This cannot be overlooked.

Conclusion

U.S. citizens living in Canada are often aware of their U.S. tax obligations. What might not be as well understood is how broad these obligations are when it comes to the couple’s tax filings and reporting. It is important to seek advice from a qualified cross-border advisor.

[1] Treated as U.S. resident for purposes of Chapter 1 and Chapter 24 and sections 6012, 6013, 6072 and 6091 of the U.S. Tax Code.

[2] This obligation extends to any account to which the U.S. spouse has signing authority.