PFIC exposure calculator
See what the default PFIC rules cost on a non-US fund held for years.
Open itThe surtax on investment income applies to the smaller of two numbers: your net investment income, and the amount by which your modified adjusted gross income exceeds the threshold for your filing status. This shows both and charges the lesser.
Your year
The thresholds are set by status and are not indexed for inflation.
US$
Adjusted gross income, increased by the excluded foreign earned income net of the deductions attributable to it.
US$
Interest, dividends, capital gains, rents, royalties and non-qualified annuities, net of allocable deductions.
%
Three point eight per cent under the current rule. Editable if it moves.
US$
Leave at zero to use the figure for your status. The figures are cited below.
Surtax due
—
Charged on —
The surtax applies —
Threshold for your status—
Income above the threshold—
Net investment income—
The lesser of the two, which is the base—
Rate—
Headroom below the threshold—
Surtax as a share of investment income—
Two numbers, and the smaller one wins
The surtax is not a flat charge on investment income. It is charged on the lesser of your net investment income and the amount by which modified adjusted gross income exceeds the threshold. That means a filer with large investment income but income only just over the threshold pays on the small excess, and a filer with income far over the threshold but modest investment income pays on the investment income only.
The thresholds are set by filing status and are not indexed, so they catch more people every year. The readout prints both candidate figures and names the one that formed the base, because knowing which constraint is binding tells you what would actually reduce the charge.
Why it hurts a cross-border investor in particular
Two features make this expensive for someone living outside the United States. First, excluded foreign earned income is added back for the purposes of this tax, so the exclusion that removed the salary from income tax does not remove it from the threshold test — it can push you over the threshold on income you were not taxed on.
Second, and more painful, foreign tax credits do not offset this tax. A resident of Canada or India paying full local tax on the same dividends and gains still pays the surtax on top, with no credit mechanism to relieve it, and most treaty articles do not reach it. That is genuine double taxation, and the planning is about the base rather than the credit.
Worked example
A US citizen living in India, filing singly, with modified adjusted gross income of 320,000 dollars including 60,000 of dividends and gains.
- The threshold for a single filer is 200,000, so the excess is 120,000.
- Net investment income is 60,000, which is the smaller of the two figures, so it is the base.
- The surtax is 3.8% of 60,000 — 2,280 dollars, with no credit for the Indian tax on the same income.
Drop the income to 240,000 and the excess becomes 40,000, which is now the smaller figure. The base falls to 40,000 even though the investment income did not change.
What this calculator assumes
- The rate and the four thresholds are the current statutory figures, prefilled and cited. All are editable.
- Modified adjusted gross income here means adjusted gross income increased by excluded foreign earned income net of attributable deductions, which is the definition this tax uses.
- No foreign tax credit is applied, because none is available against this tax. That is the rule, not a simplification.
- Estates and trusts use a different threshold mechanism entirely and are not modelled.
An estimate, not advice. This is an estimate built from what you typed, not advice on your file. Nothing here reads your documents, checks your treaty article or looks at the year you are actually in. Where the number matters, we agree a fixed fee in writing before any work starts.
Where these figures come from
- current guidance Topic no. 559, net investment income tax — IRS
- current guidance Questions and answers on the net investment income tax — IRS
- current instructions Instructions for Form 8960 — IRS
Any figure prefilled in the panel above is stated with the year it belongs to and can be changed. Rates and thresholds move; a calculator that asks you for the current one stays right, and one that hides a guess does not.
Cross-border situations we are engaged for
Case study 1
A TFSA That Costs More Than It Saves
Canadian tax-free accounts are not tax-free to a US person, and some of them carry a reporting form of their own. The file is a review of what is held, what each account triggers on the US side, and whether the account is worth keeping once the reporting is priced in.
Read how this one runs
Case study 2
Three Account Types, Three Tax Answers
Interest on each is treated differently and the deduction at source follows the account rather than the person. Holding the wrong one for the purpose is a recurring and avoidable cost.
Read how this one runs
Case study 3
A Non-Resident Estate Holding US Assets
US situs assets sit inside the US estate tax net regardless of where the owner lived, and the exemption available to a non-resident is not the resident one. The file establishes situs asset by asset before any relief is claimed.
Read how this one runs
Case study 4
A Canadian Landlord With Property in the United States
Gross withholding on US rents takes no account of mortgage interest, tax or repairs, so a leveraged property can face tax on turnover. An election onto net basis fixes that, and it has its own timing and its own filing.
Read how this one runs
Case study 5
A Company Abroad Owned by a US Person
A business incorporated where the owner lives is a foreign corporation to the IRS, with a reporting package of its own and schedules that need local accounts restated. Classification comes first, because it decides what is reportable and when profits are taxed.
Read how this one runs
Case study 6
Wintering in the US Long Enough to Become a US Filer
Days in the United States accumulate across three years, and enough of them make you a US resident for tax regardless of immigration status. The file counts the days properly and files the statement that keeps the position closer connection rather than residence.
Read how this one runs
Case study 7
First Canadian Return After Arriving Mid-Year
The arrival date splits the year and sets the cost base of what you brought with you. Getting that date and those values right is what determines whether a later sale is taxed on the whole gain or only on the part that accrued after landing.
Read how this one runs
Case study 8
Paying a Dividend Up to a Foreign Parent
The withholding rate depends on the treaty, on the size of the holding, and on whether the parent is the beneficial owner rather than a conduit. Establishing all three before the payment is what secures the lower rate at source.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
International Tax Planning & Advisory
Strategy and compliance for income, assets and families spread across borders.
One coordinating team: filings on every side of the border are sequenced so treaty relief and foreign tax credits are claimed once — and in the right country.
U.S. & Cross-Border Tax Returns
Dual filers: U.S. citizens in Canada and Canadians with U.S. income run two parallel systems — we prepare both, in the right order, every year.
Expat & Emigration Tax
The move year is its own project: the elections and valuations filed that year decide the next decade of both countries’ returns.
Non-Resident Canadian Tax
Default withholding is 25% of gross: elective returns routinely turn over-withheld rent and pensions into refunds.
Transfer Pricing & BEPS
Documentation prepared with the return is the cheapest insurance in international tax; reconstructing it during an audit is the most expensive.
Tax Treaties & Withholding
Relief is only as good as the paperwork claiming it — we build treaty positions that survive review on both sides.
Cross-Border Estates & Trusts
Wills drafted for one country routinely misfire in the other — deemed disposition here, estate tax there, credits in between.
Global Investments & Reporting
Information returns carry the sharpest penalties — $25 a day whether or not any tax is owing. We keep them clean and on time.
Cross-Border Corporate Tax
Expansion raises the same four questions every time — entity, PE, repatriation, payroll. We answer them before the tax authorities do.
India Tax for NRIs & Returning Residents
The deduction is taken on the sale price, not the gain — which is why an NRI property sale strands cash unless the certificate is applied for before closing.
Canadian Tax with a Foreign Element
Residency is decided on facts, not on a form — and the year you arrive or leave is the one where the largest amounts turn on the smallest details.
UAE Tax for Expats & Their Home Country
A zero-tax country is only half the answer — the question that decides the bill is whether the country you came from still treats you as resident.
Industries & Client Types We Serve Worldwide
Global E-commerce & Marketplaces
Technology & SaaS
Professional Services Firms
Cross-Border Real Estate
Importers, Exporters & Manufacturers
Athletes, Artists & Entertainers
Remote Workers & Digital Nomads
Investment Funds & Holding Companies
Global E-commerce & Marketplaces
- Foreign VAT / GST / sales tax registrations
- Marketplace withholding reviews
- Inventory nexus & PE analysis
- Multi-currency books reconciled
Who We Serve:
Technology & SaaS
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
- U.S. expansion: entity & PE setup
Who We Serve:
Professional Services Firms
Firms and partners working across borders meet Regulation 105 withholding, PE risk on long engagements and per-country payroll for travelling staff.
A partnership is taxed in the hands of its partners, so one engagement abroad can reach every partner's personal return. The order matters: the waiver is applied for before the invoice, the presence is tracked before it becomes an establishment, and the payroll is registered before the first day worked in the other country.
- Reg 105 / 102 waivers
- Permanent establishment risk
- Partner mobility planning
- Cross-border withholding recovery
Who We Serve:
Cross-Border Real Estate
- Section 216 rental returns
- FIRPTA withholding recovery
- Section 116 clearance
- Treaty credit optimization
Who We Serve:
Importers, Exporters & Manufacturers
- Transfer pricing documentation (s.247)
- Customs value vs transfer price
- Foreign affiliate reporting (T1134)
- Country-by-country reporting
Who We Serve:
Athletes, Artists & Entertainers
- Reg 105 & U.S. CWA agreements
- Multi-state & country calendars
- Touring income allocation
- Royalty & image-rights withholding
Who We Serve:
Remote Workers & Digital Nomads
- Residency analysis before moving
- Employer payroll exposure
- Totalization & social security
- Foreign tax credits
Who We Serve:
Investment Funds & Holding Companies
- Treaty access & PPT reviews
- FAPI & surplus computations
- Withholding-efficient routing
- Governance & substance
Who We Serve:
