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Form 8621 and PFIC Rules: Who Files, the Exceptions and How It Is Filed
Updated: Oct 5
Short answer: Form 8621 is the information return for U.S. persons who own shares of a passive foreign investment company (PFIC). It is attached to your tax return. A $25,000 de minimis exception ($50,000 joint) excuses only part of the reporting, not every filing trigger.
Key takeaways
A foreign corporation is a PFIC if it meets the income test or the asset test.
You file one Form 8621 for each PFIC, for each year one of five listed events happens.
The $25,000 exception ($50,000 on a joint return) excuses Part I only, and only if there was no excess distribution or gain on disposition.
Form 8621 is attached to your tax return and due when the return is due, including extensions.
We prepare U.S. returns that include Form 8621 for individuals. We do not give investment advice.
What a PFIC is
The instructions define a PFIC by two tests. A foreign corporation is a PFIC if it meets either one:
Income test: 75% or more of its gross income is passive income.
Asset test: at least 50% of its average assets produce, or are held to produce, passive income.
Many people search for "foreign mutual funds" and "PFIC" together. The instructions define a PFIC by the foreign corporation's income and assets, not by a product label. Whether a particular fund you own is a PFIC depends on those two tests, so each holding has to be checked.
Who files Form 8621
The form is titled "Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund." A U.S. person who is a direct or indirect shareholder of a PFIC files it for each tax year in which any of these happens:
You receive certain distributions.
You recognize gain on a disposition of PFIC stock.
You report qualified electing fund (QEF) or section 1296 mark-to-market information.
You make an election reportable in Part II.
You must file the annual report under section 1298(f).
A separate Form 8621 is filed for each PFIC, including each PFIC in a chain of ownership. Joint filers may file one form for a single PFIC in which each owns an interest.
Indirect shareholders include a 50%-or-more shareholder of a non-PFIC foreign corporation that owns a PFIC, and owners of pass-through entities (partnership, S corporation, trust, estate) that hold one.
One carve-out: a U.S. person who owns PFIC stock only through certain tax-favored accounts, such as IRAs, 403(b) and 457(b) plans, or 529 and ABLE programs, is not treated as a PFIC shareholder.
The de minimis exceptions
Two exceptions let you skip Part I, the annual reporting, for a section 1291 fund:
$25,000 exception: all PFIC stock you own (directly or indirectly, counting QEFs, section 1291 funds and mark-to-market stock, other than stock held through another U.S. person or PFIC) is $25,000 or less on the last day of the tax year. On a joint return the combined threshold is $50,000.
$5,000 exception: for an indirectly owned section 1291 fund, your proportionate share is $5,000 or less on the last day of the tax year.
Both apply only if there was no excess distribution and no gain on disposition.
What they do not excuse matters just as much. These are exceptions from completing Part I. An excess distribution, a gain on disposition, QEF or mark-to-market reporting, or an election still triggers a Form 8621 under the five-event list above. A separate $25,000 and $50,000 test appears in a deemed election for publicly traded stock treated as a qualifying insurance corporation. That is a different rule.
How it is filed
Attach Form 8621 to your tax return and file both by the return's due date, including extensions. If no return is required, you file Form 8621 directly with the Internal Revenue Service Center, Ogden, UT 84201-0201.
If you also file Form 8938, you can check the "Excepted Specified Foreign Financial Assets Reported" box, and the duplicative-reporting rules apply. Our FBAR vs Form 8938 guide explains that form.
What we do and do not do
I am Sabih Shafi, an IRS Enrolled Agent, federally licensed to represent taxpayers before the IRS in all 50 states. We serve Americans in all 50 states and abroad, in English and Spanish.
We prepare U.S. returns that include Form 8621 for individuals. We can help you work out which holdings need a form and which exceptions apply.
We do not give investment advice. We cannot tell you what to buy, hold or sell. We quote a flat fee in writing before work starts, and the first review is free and takes 20 minutes. Call or text (323) 900-0305, or book your free review.
General information, not tax advice for your situation.
Frequently Asked Questions
What is Form 8621 used for?
It reports your ownership of a PFIC, plus distributions, gains, elections, and QEF or mark-to-market information. A separate form is filed for each PFIC.
Do I have to file if my PFIC holdings are under $25,000?
Possibly not for Part I. The exception requires $25,000 or less ($50,000 joint) on the last day of the year and no excess distribution or gain on disposition. An election or other trigger still requires a form.
Is Form 8621 filed with my return?
Yes. It is attached to your tax return and due with it, including extensions. If no return is required, it goes to the Ogden service center directly.
Are my IRA investments covered by Form 8621?
Owning PFIC stock only through certain tax-favored accounts, including IRAs, means you are not treated as a PFIC shareholder under the instructions. Holdings outside those accounts are tested separately.
What is the penalty for not filing Form 8621?
The instructions we relied on for this page do not state a late-filing penalty amount, so we do not quote one. If you missed years, book a review.
I missed prior years. What are my options?
The IRS has procedures for delinquent international information returns and, for non-willful individuals, streamlined procedures. See our streamlined offshore procedures guide.
Last reviewed: October 2026 by Sabih Shafi, EA
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This article is general information, not individual tax advice. If you want to talk through your own IRS or state balance, book a free 20-minute review or call or text us directly.
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