T1134 for Canadian Owners of US LLCs: The Foreign Affiliate Return CRA Expects

If you are a Canadian resident with a US LLC, T1134 is the CRA form that asks for the LLC's full financial picture, not just whether you own it. Because the CRA classifies a US LLC as a corporation, your LLC is almost always your foreign affiliate. This post explains when T1134 triggers, how it differs from T1135, which supplement version you file, the filing deadline that changed in 2021, and where a Form 8832 election shifts the analysis.

30-second answer

A Canadian resident who owns 10 percent or more of a US LLC generally has a T1134 filing obligation, because the CRA treats the LLC as a foreign affiliate. The return is due 10 months after the end of your tax year for tax years beginning after 2020. The dormant exception (no separate Supplement, listed only on Summary Part I Table D) requires both that the LLC is a non-controlled foreign affiliate and that it has gross receipts under CAD $100,000 with total assets FMV not exceeding CAD $1,000,000. Most Canadian-resident solo owners control the LLC (CFA status), so they file the full Supplement regardless of size. Penalties stack: $25 per day base, up to $12,000 for knowing or grossly negligent failures (or $24,000 after a CRA demand), plus an additional 5 percent of the cost amount of your shares and indebtedness in the affiliate after 24 months.

T1134 vs T1135: what's different

These two CRA forms confuse almost every Canadian LLC owner because both target foreign holdings. They are not interchangeable. They cover different things, with different thresholds and different consequences.

The key practical difference: T1135 reports that you hold something. T1134 reports what that something did all year. T1134 is the heavier form because the CRA wants the affiliate's financial statements at line-item granularity, not just the cost basis.

For a Canadian resident with one US LLC, both forms generally apply once you cross either threshold. They do not substitute. Filing T1135 does not satisfy T1134 and vice versa. We cover the holding-side disclosure in detail in our T1135 guide and we recommend reading the two together.

When a US LLC triggers T1134

The CRA classifies a US LLC as a corporation under Canadian tax law, regardless of how the IRS treats it. That classification is what pulls the LLC into the foreign affiliate regime in section 95 of the Income Tax Act.

Foreign affiliate, the broad category, requires:

• A direct or indirect equity percentage of 1 percent or more on its own, and
• An equity percentage combined with related Canadian residents of 10 percent or more

For a single-member LLC owned entirely by you as a Canadian resident, you own 100 percent. T1134 applies. For a multi-member LLC where you own 25 percent and an unrelated US partner owns 75 percent, you still own more than 10 percent. T1134 applies to you.

Controlled foreign affiliate, the narrower category, requires that you (alone or with related parties and a small group of unrelated Canadians) effectively control the LLC. For most Canadian-resident solo or majority owners, the LLC is a controlled foreign affiliate (CFA). For a Canadian resident holding a minority stake in a US-controlled LLC, the LLC is a non-controlled foreign affiliate.

The distinction matters because:

• Controlled foreign affiliates trigger FAPI accrual under section 91 of the Income Tax Act. Passive income earned inside the LLC (interest, royalties, rents on passive holdings, taxable capital gains from portfolio investments) accrues to the Canadian owner immediately, before any distribution. If your LLC is purely an active operating business, FAPI exposure is generally minimal. If it holds investments or earns passive-character income, FAPI can produce Canadian tax before any cash flows to you.
• Non-controlled foreign affiliates are exempt from current-year FAPI accrual. T1134 still applies, but the income recognition timing is governed by distribution, not accrual.

For an in-depth treatment of how this interacts with the broader CRA-IRS classification problem, see our CRA vs IRS LLC mismatch decision guide.

The Summary, the Supplement, and the dormant exception

T1134 is not one form. It is a Summary filed once per reporting taxpayer, plus a separate Supplement for each foreign affiliate. The only relief route is the dormant non-controlled affiliate exception, which removes the Supplement requirement entirely (the affiliate is listed only on Summary Part I Table D).

The dormant exception is narrower than it looks. Two facts disqualify most Canadian-owned US LLCs:

1. The LLC is a controlled foreign affiliate. The dormant exception is available only for non-CFAs. A Canadian-resident solo or majority LLC owner controls the LLC (CFA status) and cannot use it, regardless of how small the LLC is.
2. The LLC has any meaningful activity. Once gross receipts cross CAD $100,000 or total assets FMV exceeds CAD $1,000,000, the dormant exception is lost even for non-CFAs and the full Supplement applies.

If you operate one US LLC as a Canadian-resident solo owner, expect to file the full Supplement annually. The dormant route is for narrow cases: a small minority stake in an unrelated foreign entity that is also genuinely inactive on both receipts and asset tests.

The full supplement requires the LLC's financial statements at the level a Canadian accountant can use to classify income (active vs investment vs FAPI categories), track surplus accounts, and reconcile inter-company flows back to your personal T1 or to a Canadian holding company's T2. Bookkeeping discipline on the US side directly determines how painful T1134 preparation is on the Canadian side. We cover the bookkeeping baseline in our non-resident LLC bookkeeping guide.

Filing deadlines and the 2021 rule change

The deadline rule changed twice in the past five years. The current rule:

For a Canadian-resident individual using a calendar tax year, that means:

• Tax year ending December 31, 2025: T1134 is due by October 31, 2026
• Tax year ending December 31, 2026: T1134 due by October 31, 2027

For a Canadian corporation owning the LLC, count 10 months from the corporation's fiscal year end. A June 30, 2026 corporate year end produces an April 30, 2027 T1134 deadline.

Important: the T1134 deadline does not align with your T1 personal tax return (April 30 or June 15 for self-employed) or your T2 corporate return (six months after year end). Filing your personal or corporate return on time does not extend the T1134 clock. Many Canadians who file their T1 by April 30 forget T1134 is still due months later in the same calendar year.

Penalty structure: heavier than T1135

T1134 penalties stack faster than most Canadian-side filings, including T1135. The penalty regime under sections 162(7), 162(10), and 162(10.1) of the Income Tax Act:

Two things make T1134 penalties harsher than they look on paper:

1. Per affiliate, not per return. If you own three foreign affiliates, the cap multiplies. A Canadian resident with three US LLCs faces up to $7,500 in base penalties for three late T1134 Supplements, plus stacking thereafter.
2. The 5 percent cost-amount penalty has no fixed dollar cap. The base is your CAD-equivalent cost amount in the LLC's shares plus any indebtedness the affiliate owes you, not the LLC's current market value. If that combined cost amount totals CAD $500,000, the s.162(10.1) penalty after 24 months of non-filing is CAD $25,000 on that affiliate alone. The penalty scales with your tax-cost investment, not the operating value of the business.

The Voluntary Disclosures Program (VDP) can reduce or eliminate penalties for past non-filing, but only if the disclosure is voluntary (you came forward before CRA contacted you), complete (all years, all affiliates), and made with full payment of any underlying tax. VDP is a procedure with strict eligibility rules, not a casual amnesty.

Where 8832-elected LLCs change the analysis

If you have elected (or are considering) corporate taxation on your US LLC via IRS Form 8832, the T1134 analysis shifts in subtle but important ways. We cover the election mechanics, 75-day window, and 5-year lockup in our Form 8832 corp election guide for Canadian LLC owners. For T1134 purposes, the relevant changes are:

• Classification mismatch resolves. Before 8832, the CRA classified the LLC as a corporation and the IRS as a disregarded entity. The T1134 obligation already applied because CRA's view governs. After 8832, both sides classify the LLC as a corporation. T1134 still applies. The election does not eliminate the filing.
• FAPI tracking becomes more important. A C-corp-elected LLC retaining earnings at the entity level is the classic FAPI scenario for a controlled foreign affiliate. If the LLC earns passive income, that income accrues to you (or your holdco) annually, even though no cash distribution occurred. The T1134 full supplement is the form that surfaces this to CRA.
• Surplus account disclosure becomes substantive. A pre-election LLC with no US corporate tax has minimal exempt surplus to track. Post-election, the LLC pays 21 percent US corporate tax. Earnings net of that tax build exempt surplus, available for tax-free repatriation in future years. T1134 is where you document this. Inaccurate or missing surplus tracking on T1134 can cost you the surplus benefit when you eventually distribute.

If you own the LLC through a Canadian holding company instead, T1134 is filed by the holdco on its T2 cycle. The mechanics are similar but the surplus accounts feed into Canadian dividend planning differently. We cover that structure in our Canadian holdco owning US LLC guide.

A common misconception: that filing 8832 somehow simplifies T1134. It does not. The classification match makes the FAPI analysis cleaner, but the filing burden is the same or slightly heavier because the surplus accounts now carry economic weight.

Frequently asked questions

Do I need to file T1134 if my LLC had no income this year?

Yes, in almost all cases. T1134 is a reporting obligation tied to ownership, not income. A Canadian resident who controlled a foreign affiliate at any point during the year files T1134 for that year. The dormant exception (no Supplement, list on Summary Table D only) applies only when (a) the affiliate is a non-CFA, (b) gross receipts are below CAD $100,000, and (c) total assets FMV is at or below CAD $1,000,000. Solo Canadian LLC owners control the LLC and therefore cannot use the dormant exception; they file the full Supplement even for a quiet year.

What if I missed T1134 for prior years?

The Voluntary Disclosures Program (VDP) is the standard route. To qualify, the disclosure must be voluntary (made before CRA contacts you or starts an audit), complete (all years and all affiliates), and accompanied by any tax owing. VDP can reduce or eliminate the late-filing penalties under sections 162(7) and 162(10). Once CRA begins a review or audit, VDP is no longer available for the years in scope.

Does T1134 apply to a US LLC owned through my Canadian corporation?

Yes. T1134 is filed by the Canadian-resident reporting taxpayer who owns the foreign affiliate. If your Canadian corporation owns the US LLC, the corporation files T1134 on its T2 cycle (10 months after the corporate year end). The individual shareholder does not file a separate T1134 for the same LLC, but T1135 may still apply at the individual level if you hold other specified foreign property.

Can I file T1134 myself or do I need a cross-border accountant?

The mechanics are documentable, but T1134 requires the LLC's financial statements to be reclassified into Canadian tax categories (active business income, FAPI, exempt vs taxable surplus). Self-prepared T1134 returns often miss the surplus account tracking, which becomes a problem in the year you distribute. Most Canadian residents with a US LLC use a cross-border accountant for the LLC's first year filing and then maintain consistency in subsequent years.

What is the difference between T1134 Summary and T1134 Supplement?

The Summary is filed once per reporting taxpayer and lists all foreign affiliates plus organizational information. The Supplement is filed separately for each foreign affiliate (or each non-CFA when grouped under permissible rules) with the full financial detail. A Canadian resident with three US LLCs files one Summary and three Supplements.

Next steps

If you have a Canadian-resident-owned US LLC and have not filed T1134 for prior years, the order of operations is straightforward:

1. Confirm your filing obligation. Ownership above 1 percent direct or 10 percent with related parties triggers foreign affiliate status. Solo or majority Canadian ownership generally triggers CFA status.
2. Reconcile prior-year LLC financials. Pull bank statements, books, and US filings (Form 5472 and pro forma 1120, or full 1120 if 8832-elected). You need the LLC's full year to complete the supplement.
3. Determine your supplement version. Streamlined is rarely available for solo Canadian-owned LLCs. Assume full supplement.
4. File or use VDP. If current year is on time, file by the 10-month deadline. If prior years are open, evaluate VDP eligibility before contacting CRA on any other matter that might disqualify it.

Get a free quote for cross-border compliance support if you need help reconciling LLC books to Canadian tax categories or scoping a multi-year T1134 catch-up.

Related reading

• T1135 Reporting for Canadians Who Own a US LLC
• CRA vs IRS LLC Classification Mismatch Decision Guide
• Canadian US LLC Owner: When Form 8832 Corp Election Pays Off
• Canadian US LLC Owners and the Trapped FTC Problem
• When Canadians Must File IRS Form 5472 for Their US LLC
• Canadian Holding Company Owning a US LLC: When It Helps and When It Hurts