Money From Parents Abroad on H-1B or OPT: When Form 3520 Applies Over $100,000 and When It Doesn't

Your parents wired money for a down payment or a loan payoff. Whether you must file Form 3520 depends less on the amount than on your tax residency that year.

Part of our guide to US taxes on F-1, OPT and H-1B.

Money your parents send from abroad is generally not taxable income to you in the US. The real question is whether you have to report it. Form 3520 applies to a gift from parents only when two things are true in the same tax year: you are a US person for tax purposes (a citizen, a green card holder, or a resident alien under the substantial presence test), and the gifts you received from your parents and other related foreign individuals total more than $100,000. Most F-1 and OPT students in their first five calendar years are nonresidents and do not file it. Most H-1B workers are residents, so the $100,000 test applies to them.

Status as of November 1, 2026: these are standing IRS rules, in effect. The current Instructions for Form 3520 are the 12/2025 revision, which the IRS says to use "for tax year 2025 and subsequent years." For gifts you receive in calendar 2026, the form is due April 15, 2027, or October 15, 2027 if you extend your income tax return (our arithmetic from the IRS due-date rule).

Form 3520 gift from parents: the short answer

A genuine gift from your parents abroad is not taxable income to you. You report it on Form 3520, Part IV, only if you were a US person that tax year and gifts from your parents and other related foreign individuals topped $100,000. No tax is due with the form; it is due April 15, or October 15 with an extension.

Who files Form 3520 for a family gift (as of 2026-11)

"Typical" matters: your own days, entry dates and return choices decide residency. IRS Publication 519 is the official source, and our guide to the substantial presence test walks through the count.

Is money from my parents in India taxable in the US?

Not as income to you. A genuine gift is excluded from the recipient's gross income under the Internal Revenue Code (section 102), and the IRS describes a foreign gift as an amount the recipient "treats as a gift or bequest and excludes from gross income." Form 3520 is an information return; Part IV reports the gift without taxing it.

Two things can still cost you money:

• What the money earns. Pub 519 is blunt: resident aliens are "generally taxed on their worldwide income, the same as U.S. citizens." Interest the gift earns, in India or in the US, is taxable income for a resident.
• A gift that is really something else. If the money is pay for work, a business payment or a disguised loan, it is not a gift, and the label on the wire does not change that.

One tax people worry about is a different matter. The 1% federal remittance transfer tax, in effect since January 1, 2026, is collected by remittance transfer providers from senders who fund a transfer with cash, a money order or a cashier's check (Form 720 instructions). Our reading is that it reaches money sent from the US to someone abroad, not a wire your parents send you from India; our guide to the 1% remittance tax covers when it applies.

India's side is separate. Since an RBI circular of June 1, 2015, banks in India may allow each resident individual (so each parent) to remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme (RBI A.P. (DIR Series) Circular No. 106), and Indian tax collected at source (TCS) can apply to these remittances. Indian limits and rates change, so your parents' bank or a chartered accountant in India should confirm the current rules; this post covers only the US side.

Does Form 3520 apply if you are a nonresident on F-1?

Generally not. The instructions say a US person includes "a citizen or resident of the United States," and most F-1, OPT and STEM OPT students are not residents in their first five calendar years, because a student's days as an "exempt individual" do not count toward the substantial presence test.

The catch is the word "five." Pub 519 ends the student exemption once you have been exempt as a student, teacher or trainee "for any part of more than 5 calendar years," unless you establish that you do not intend to reside permanently in the US and have substantially complied with your visa's requirements. Someone who first arrived in 2022 uses 2022 through 2026. A PhD student in a sixth calendar year, or a STEM OPT worker who arrived in 2021, can be a resident alien while still in F-1 status, and Form 3520 can then apply.

H-1B and H-4 days count from day one. The substantial presence test asks for at least 31 days this year and 183 days over three years, counting all of this year's days, one-third of last year's and one-sixth of the year before. Days as an exempt F-1 student count as zero.

One clause cuts the other way. The definition covers residents "including dual residents who claim the benefits under an income tax treaty," so an H-1B worker who uses a treaty tie-breaker to file as a nonresident is still a US person for Form 3520.

The year you switch from F-1 to H-1B: a worked timeline

Take Meera, a hypothetical reader who arrived on F-1 in August 2022, whose cap-subject H-1B starts on October 1, 2026, and who stays in the US every day after that.

Two details trip people up. First, passing the test in June reaches back: Pub 519 says your residency starting date "is generally the first day you are present in the United States during that calendar year," so a February 2027 wire counts. Someone who spends the start of a year abroad generally starts on their first day back instead. Second, the 2026 answer can change. Pub 519's "first-year choice" lets someone who does not meet the test for one year, but meets it for the next, choose to be treated as a resident for part of the first year, if they were present for at least 31 days in a row and for at least 75% of the days from the start of that run to the end of the year. That would pull an October to December 2026 gift into a resident period. Both are dual-status questions; our dual-status tax return guide explains that return.

None of this is a reason to rush or delay a family transfer. If the dates are close, have a tax professional look at your real entry and status dates.

The $100,000 test: how gifts from both parents add up

The trigger is more than $100,000 in one tax year from nonresident alien individuals or foreign estates. Each parent's gift does not get its own $100,000. The instructions say "you must aggregate gifts from different foreign nonresident aliens and foreign estates if you know, or have reason to know, that those persons are related to each other."

Worked example, using 2026: Arjun, a hypothetical H-1B worker, has been a resident alien all year. His father wires $60,000 in March 2026 and his mother wires $45,000 in August 2026 for a condo down payment.

• Total from related foreign individuals: $105,000, which is more than $100,000, so Part IV applies for tax year 2026.
• Itemizing: because each gift exceeds $5,000, he lists both separately. The IRS page on gifts from a foreign person says each gift over $5,000 must be listed once the total passes $100,000.
• Deadline: April 15, 2027, or October 15, 2027 if he extends his Form 1040.
• Tax due on the gifts: none.

Had his mother sent $35,000, the total would be $95,000 and Part IV would not apply; a $10,000 wire from his grandfather would push it back over. Exactly $100,000 does not trigger it; the test is "more than."

Four edge cases worth knowing:

• Tuition or medical bills paid directly. The instructions state: "A gift to a U.S. person does not include any amount paid for qualified tuition or medical payments made on behalf of the U.S. person." Our reading is that this covers tuition your parents pay straight to the school, not money they send you to pay the bursar, rent or a student-loan servicer.
• Gifts from companies. Money from a foreign corporation or partnership, such as a family business, has a much lower threshold, $20,573 for 2026 according to the IRS gifts page, and each gift and donor must be identified.
• A middleman. Line 56 asks whether the foreign donor was "acting as a nominee or intermediary for any other person." Money routed through a family friend still has a real source.
• Property, not cash. A gift of shares, gold or a flat abroad counts at its value under the gift-tax valuation rules (section 2512). The instructions say formal appraisals are not generally required, but you should keep "contemporaneous records" of how you reached your good-faith estimate.

When is Form 3520 due, and where does it go?

The instructions set the due date as "the 15th day of the 4th month following the end of the taxpayer's tax year," which is April 15 for a calendar-year individual. If you get an extension for your income tax return, such as with Form 4868, Form 3520 moves to the 15th day of the 10th month, October 15. If you live and work abroad, the instructions give you until the 15th day of the 6th month. The extended date never runs past October 15, and "only a complete Form 3520 is considered timely filed."

The IRS gifts page is plain: "File Form 3520 separately from your income tax return." The instructions send it to the Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. The About Form 3520 page lists the current form (Rev. December 2023).

How to report a family gift, in order:

1. Confirm your residency for the year with the substantial presence test in IRS Publication 519, including your residency starting date and any dual-status period.
2. List every gift received in that tax year from your parents and other related foreign individuals, with the date and the US dollar value from your bank's conversion record.
3. Remove any tuition or medical bills your parents paid directly to the school or provider.
4. Compare the total with the $100,000 threshold, and gifts from foreign companies with the $20,573 threshold for 2026.
5. Gather the wire confirmations, your US bank statement showing receipt, and any gift letter your lender asked for.
6. Complete the identifying information at the top of Form 3520 and Part IV, listing each gift over $5,000.
7. Mail the signed form to the IRS Service Center in Ogden, Utah, separately from your Form 1040, by April 15 or your extended date.
8. Keep copies and the mailing receipt with your tax records.

What is the penalty for not filing Form 3520?

It is steep for a form that carries no tax. Under section 6039F, the instructions say a penalty of "5% of the amount of such foreign gifts applies for each month" the failure continues, "(not to exceed a total of 25%)." No penalty applies if the failure was "due to reasonable cause and not willful neglect."

On Arjun's $105,000, that is $5,250 a month, up to $26,250 (our arithmetic). The IRS gifts page adds that if a gift is not reported properly, "the IRS may determine the income tax consequences of the receipt of such foreign gift or bequest." If you already missed a year, talk to a tax professional before filing anything late; whether a reasonable-cause statement fits depends on your facts.

Does a gift for a home down payment count?

Yes. Form 3520 does not care what the money is for; a down payment, a car or a loan payoff all count the same way.

Your mortgage lender will usually ask for a signed gift letter saying no repayment is expected, plus a paper trail from your parents' account to yours. That letter is not a tax filing and does not replace Form 3520. Our guide to buying a home on H-1B or OPT covers what lenders ask visa holders for.

Moving your own money is different. Sending your own savings from your Indian account to your US account is not a gift; our guide to moving your foreign savings to the US covers that case. If your parents are lending rather than giving, put the terms in writing and ask a tax professional, because the label matters for Form 3520, for your lender and for any interest.

Form 3520 vs Form 709 vs FBAR: three different jobs

Which form covers what (as of 2026-11)

The gift exclusion figures come from the IRS 2026 inflation adjustments. Form 709 is the giver's return, so you never file it for money you receive. Gift tax also uses its own residence concept: the IRS gift-tax FAQ for non-citizens says nonresident donors are taxed on gifts of "real and tangible property" located in the US. Whether your parents have any US filing of their own is a question for their adviser.

The FBAR is about accounts, not gifts. If you are a resident alien and the gift sits in an account in India in your name, including an NRO or NRE account or a joint account with a parent, that account counts. Our FBAR and FATCA guide covers the account side in full.

Common mistakes

• Assuming F-1 means never. After five calendar years as a student you can be a resident alien while still on OPT or STEM OPT.
• Testing each parent separately. $60,000 from your father and $45,000 from your mother is $105,000 from related people, not two gifts under the line.
• Forgetting the residency starting date. Passing the substantial presence test in June can make a February gift reportable, because residency generally reaches back to your first day in the US that year.
• Mailing it with your 1040. Form 3520 goes separately to the IRS in Ogden, Utah, and an FBAR for the Indian account goes to FinCEN.
• Treating tuition sent to you as excluded. Only tuition or medical bills paid directly on your behalf fall outside the definition.
• Asking the wrong expert. Form 3520 is a tax filing. Your DSO handles F-1, OPT and SEVIS questions and an immigration attorney handles petitions and status strategy; neither prepares this form. A tax professional who handles nonresident and dual-status returns does.

Frequently asked questions

Is money from my parents in India taxable in the US?

Not as income. A genuine gift is not income to the person who receives it, so no US income tax is due on the gift itself. Interest or other income the money earns later is taxable if you are a resident alien. Separately, a US person whose family gifts top $100,000 in a year reports them on Form 3520.

When do I need to file Form 3520 for a gift from my parents?

You file Part IV when you are a US person for the tax year (a citizen, green card holder or resident alien) and received more than $100,000 that year from related foreign individuals, such as both parents combined. For 2026 gifts it is due April 15, 2027, or October 15, 2027 with an income tax extension, mailed separately to the IRS in Ogden, Utah.

Does Form 3520 apply if I am a nonresident on F-1?

Generally no. Form 3520 is filed by US persons, and most F-1, OPT and STEM OPT students are nonresident aliens in their first five calendar years because those days do not count toward the substantial presence test. After five calendar years, or after a switch to H-1B, you can become a resident alien, and a large family gift can then trigger the form.

What is the penalty for not filing Form 3520?

For unreported foreign gifts the penalty is 5 percent of the gifts' value for each month the failure continues, capped at 25 percent, unless you show reasonable cause and not willful neglect. On $105,000 of gifts that is up to $26,250. The IRS may also decide the income tax consequences of a gift that is not properly reported.

Does a gift for a home down payment count toward the $100,000?

Yes. The purpose does not change the Form 3520 test, so a wire for a down payment, a car or a student-loan payoff counts the same way. Only tuition or medical bills paid directly to the school or provider on your behalf fall outside the definition of a foreign gift. Your lender's gift letter does not replace Form 3520.

Sources

• IRS, Instructions for Form 3520 (Rev. 12/2025)
• IRS, Gifts from foreign person
• IRS, About Form 3520
• IRS, Publication 519, U.S. Tax Guide for Aliens
• IRS, Report of Foreign Bank and Financial Accounts (FBAR)
• IRS, Tax year 2026 inflation adjustments
• IRS, Gift-tax FAQ for nonresidents not citizens of the United States
• IRS, Instructions for Form 720
• Reserve Bank of India, A.P. (DIR Series) Circular No. 106, Rationalisation under LRS

How we checked this: we read the IRS Form 3520 instructions (Rev. 12/2025), the IRS foreign-gift and About Form 3520 pages, Publication 519 (2025), the FBAR page, the 2026 inflation-adjustment release, the nonresident gift-tax FAQ, the Form 720 instructions and RBI Circular No. 106 on November 1 and 2, 2026. Dates and dollar figures marked "our arithmetic" are ours. Meera and Arjun are illustrations, not real readers.

This is general information, not legal or tax advice; your own entry dates, status documents and a tax professional who handles nonresident returns should decide how the rules apply to you.

A family gift often arrives at the same moment as a bigger decision, such as a first home, a job change or the jump from STEM OPT to H-1B. If the job side of that move is what you are working through, F1Jobs helps international professionals find employers who sponsor.