On this page
- What Form 8840 is
- How the substantial presence test counts your days
- The three conditions for the closer connection exception
- When the exception does not apply
- When Form 8840 is due
- What happens if Form 8840 is not filed on time
- Why non-resident status matters for a casino tax refund
- Frequently Asked Questions
You spend the winter in Florida or Arizona, go home to Canada in the spring, and still think of yourself as a Canadian resident. U.S. law may count it differently. The substantial presence test adds up your days in the U.S. over three years, and a few winters can be enough to meet it. When that happens, Form 8840 is the statement a Canadian uses to claim the closer connection exception and stay a non-resident. This article explains how the days are counted, what the exception requires, and why that status matters for a casino tax refund claim.
What Form 8840 is
The IRS title of this form is the Closer Connection Exception Statement for Aliens. It is a short statement filed by a person who is not a U.S. citizen or green card holder. On it, the person describes where they live and where their personal and economic ties are, and explains why those ties point to another country rather than the United States. For many Canadian snowbirds, that other country is Canada.
The form exists because of the substantial presence test. That test counts the days a person spends in the United States. A person who meets it is generally treated as a resident alien for that year. A resident alien is taxed much like a U.S. citizen, which brings different filing rules than those for a non-resident. The closer connection exception is one way the rules allow certain people who meet the test to remain non-residents.
According to the IRS, filing this statement is how a person claims the closer connection exception. The exception does not apply on its own, and the IRS does not work it out from border crossings or travel records. The form asks factual questions, for example where the person’s permanent home is, where their family lives, where their car and bank accounts are, and where they hold a driver’s license and are registered to vote. Those answers support the claim. The IRS decides whether it is accepted.
Snowbirds who win at a U.S. casino often meet this form for the first time when they ask whether they are still a non-resident for tax purposes. The article on how the substantial presence test can affect a snowbird’s casino refund covers that link. The sections below explain how the days are counted and which conditions the exception carries.
How the substantial presence test counts your days
The substantial presence test is a two-part count, and both parts have to be met. The first part looks only at the current year. The rule requires at least 31 days of physical presence in the United States in that year. A person with 30 days or fewer in the current year does not meet the test, whatever happened in earlier years. The second part looks back over three years and asks whether a weighted total of days reaches 183.
The weighted total follows a formula set out in the IRS rule. Every day in the current year counts in full. Days in the prior year count at one third. Days in the year before that count at one sixth. The three figures are added together. Because the older years are discounted, the total can reach 183 even when no single year comes close. The table below works through a snowbird who spends 122 days in Florida each winter for three years running.
At 122 days a year, the weighted total lands at 183, so the test is met. At 121 days a year, the same formula gives 181.5, and it is not. The IRS counts any part of a day as a full day, so the day you cross the border in the evening counts. Some days are left out of the count, such as days in transit between two foreign points for less than 24 hours and days on which you regularly commute from Canada to work in the United States.
Under the rule, a person who meets the test is treated as a U.S. resident for that year unless an exception applies. The closer connection exception, covered in the next sections, is one of them. For how this day count can affect a casino withholding claim, see how the substantial presence test affects a snowbird’s casino refund.
| Year | Days physically present | How the rule weights them | Weighted days |
|---|---|---|---|
| 2026 (current year) | 122 | All days count (x 1) | 122.00 |
| 2025 (prior year) | 122 | One third (x 1/3) | 40.67 |
| 2024 (two years before) | 122 | One sixth (x 1/6) | 20.33 |
| Total | 366 actual days over three years, none above 122 in a year | 31-day current-year minimum met | 183.00 |
The three conditions for the closer connection exception
The IRS lists three conditions for the closer connection exception, and a person has to meet all of them for the same year. Missing one is enough to lose the exception. The conditions are:
- Presence in the United States for less than 183 days during the year.
- A tax home in a foreign country for the entire year.
- A closer connection to that foreign country than to the United States during the year.
The first condition uses a different count from the substantial presence test. The weighted three-year total does not matter here. Only the actual days spent in the United States during the current year are counted. A snowbird who reaches 183 weighted days but spent, say, 150 days in Florida this year still meets this condition. Someone with 183 or more days in the current year alone does not. The day count for snowbirds is worth checking before anything else.
The second condition is about the tax home. The IRS treats a tax home as the general area of a person’s main place of business or employment. A retiree with no business uses the regular place where they actually live. For a Canadian snowbird, that usually means the home in Canada. The rule says for the entire year, so a tax home that moved to the United States partway through the year does not satisfy it.
The third condition compares two countries. Form 8840 asks a series of factual questions to show where the stronger ties are. They cover the location of the permanent home and family, where cars, furniture and other personal belongings are kept, which country issued the driver’s license, where the person votes, and where bank accounts and social or professional ties are held. The answers are weighed together. No single answer settles the question, and the IRS decides how the facts add up.
When the exception does not apply
The closer connection exception has a narrow entry point. According to the IRS, it is open only to a person who meets the substantial presence test for the year and was present in the United States on fewer than 183 days during that same year. Both parts have to be true at once. The exception does not replace the test. It applies only to people the weighted day count has already caught.
The 183-day limit looks at the current year by itself. The weighted three-year total from the substantial presence test plays no part here. What counts is the actual number of days spent in the United States during the year in question. A snowbird who spent 175 days in Arizona that year can still look at the exception. A snowbird who spent 183 days or more cannot, however strong their ties to Canada are.
Those ties matter only after the day limit is cleared. A home in Ontario, family in Canada, Canadian bank accounts and a provincial health card are the kind of facts the IRS weighs for a closer connection. For a person at 183 days or more in the current year, the IRS never gets to that question. The exception is closed for that year, and Form 8840 cannot reopen it.
The opposite case also falls outside the exception. A person whose weighted total stays below 183 days does not meet the substantial presence test, so there is nothing for the exception to fix and no Form 8840 to file for that reason. For how the day count can affect a casino refund claim, see how the substantial presence test affects snowbirds.
When Form 8840 is due
The form’s instructions tie the deadline to the due date for the U.S. income tax return for that year. For a snowbird who also had casino winnings withheld, the statement goes along with the refund claim. U.S. Tax Recovery prepares and files this for you.
What happens if Form 8840 is not filed on time
The IRS attaches a timing condition to the closer connection exception. According to the Form 8840 instructions, a person who does not file the form on time cannot claim a closer connection to a foreign country. Meeting the three conditions in fact does not carry the claim on its own. The statement has to reach the IRS by the date the instructions set. Without it, the IRS looks only at the day count under the substantial presence test.
In practice, a snowbird who meets the substantial presence test and has no timely Form 8840 is treated as a U.S. resident alien for that year under the test. A resident alien is generally taxed on worldwide income and files Form 1040 rather than Form 1040-NR. For a Canadian who expects to claim back casino withholding as a non-resident, that changes which return applies. The snowbird guide to the substantial presence test shows how this plays out for a refund claim.
The rule has one exception. It does not apply if the person can show by clear and convincing evidence that they did two things:
- took reasonable actions to become aware of the Form 8840 filing requirements, and
- took significant steps to comply with those requirements.
Both parts have to be shown. Clear and convincing evidence is a demanding standard, higher than a plain statement that the form was overlooked.
The burden of proof sits with the person making the claim. Records made at the time carry more weight than an account written later, so dated notes, correspondence or other documents showing when the person learned of the requirement and what they did next are the kind of material involved. Whether the evidence meets the standard is a decision the IRS makes on the facts of each case. A late filer cannot treat the exception as automatic.
Why non-resident status matters for a casino tax refund
The 30% withheld from a non-resident’s casino win is reported on Form 1042-S. A Canadian claims it back through the U.S. return for non-resident aliens, Form 1040-NR. That route only fits someone who is a non-resident for the year. A snowbird who meets the substantial presence test and has no exception in place is treated as a resident alien under the rule, and Form 1040-NR is no longer the return that matches their status. The closer connection statement is how a snowbird under 183 days in the year keeps non-resident status.
The treaty provisions that let a Canadian resident claim back the withholding and deduct documented gambling losses depend on being a non-resident. For tax years beginning after 2025, U.S. law allows only 90% of wagering losses as a deduction.
U.S. Tax Recovery is an IRS Certifying Acceptance Agent, listed on the IRS’s Acceptance Agents directory for Canada. The company is not affiliated with the IRS. It prepares and certifies the documents, including the 1040-NR, the closer connection statement where one applies, and Form W-7 when an ITIN is needed. The IRS reviews the claim, decides the outcome and sets the pace, which varies from case to case.
Frequently Asked Questions
Do I have to file Form 8840 if I just spend the winter in Florida?
Only if your days in the U.S. meet the substantial presence test for that year. The test is a day-count formula. A Canadian who stays under it is already treated as a non-resident for U.S. tax purposes and has no closer connection exception to claim. A Canadian who meets it can use Form 8840 to explain why Canada is still home.
How do I figure out if my days add up to the substantial presence test?
The rule adds every day spent in the U.S. in the current year, one-third of the days in the year before, and one-sixth of the days in the year before that. If the total reaches 183 and the current year has at least 31 days, the test is met. A partial day in the U.S. generally counts as a full day.
Can I still use Form 8840 if I was in the U.S. for 183 days or more this year?
No. The closer connection exception only applies when you were in the U.S. for fewer than 183 days in the current year. It is also unavailable to someone who has applied for a green card or taken other steps toward U.S. permanent residence. When the exception is off the table, other residence rules, including the tax treaty between Canada and the U.S.’s own rules, have to be looked at instead.
What happens if I never sent in Form 8840 for a year I needed it?
The form’s instructions say the exception cannot be claimed unless you show, by clear and convincing evidence, that you took reasonable steps to learn about the filing requirement and significant steps to comply. Without that showing, you can be treated as a U.S. resident for that year. The IRS reviews the explanation and makes the decision case by case.
Why does Form 8840 matter for getting back the tax a casino withheld?
A refund claim for casino withholding is made by a non-resident alien. The treaty provisions for Canadians, including the deduction for documented gambling losses, depend on being a non-resident. If your days make you a U.S. resident and no exception applies, different rules govern your return.
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