Relocating for work, family or an E-2 business
Moving from Canada to the US: The Tax Checklist
Leaving Canada triggers Canadian departure rules on the same day your US tax residency begins. Gurleen Kaur, CPA licensed in British Columbia and Washington State, helps you plan the move year on both returns before it is locked in.
Quick answer
What taxes apply when you move from Canada to the US?
Two things happen at once. Canada treats you as having disposed of most of your property at fair market value on the day you leave, reported on Form T1243, and Form T1161 is required if the property you owned was worth more than CAD$25,000 (CRA). Canadian real estate and RRSPs are among the exceptions. On the US side, the first year is often a dual-status year, with residency start dates set by the tests in Publication 519. RRSP growth can stay deferred under the treaty without a separate election (IRS), but Canadian accounts become reportable on the FBAR once you are a US person.
Canada: leaving the tax system
| Item | What the CRA says | Source |
|---|---|---|
| Deemed disposition | You are deemed to have disposed of certain property at fair market value when you leave. Exceptions include Canadian real or immovable property and registered plans such as RRSPs. | CRA |
| Form T1243 | Calculates the capital gains or losses on property deemed disposed of on the date you ceased to be resident. | CRA |
| Form T1161 | Required if the fair market value of all property you owned when you left was more than CAD$25,000, excluding cash, bank deposits and personal-use property worth less than CAD$10,000. | CRA |
| Form T1244 deferral | Elect to defer paying the departure tax, without interest, until the property is sold. The election is due by April 30 of the year after you leave, and security is required if the federal tax is more than CAD$16,500. | CRA |
United States: your first tax year
| Item | What to know | Source |
|---|---|---|
| Residency start date | Set by the green card test or the substantial presence test; the year you arrive is often dual-status. | Publication 519 |
| RRSP and RRIF | Eligible taxpayers receive the treaty deferral automatically; Form 8891 is no longer filed. The accounts still count for FBAR and Form 8938. | IRS |
| TFSA and Canadian funds | The US does not treat TFSA income as tax-free, and Canadian mutual funds and ETFs are commonly PFICs reported on Form 8621. | Form 8621 instructions |
| FBAR | Once you are a US person, Canadian accounts that together exceed US$10,000 at any time in the year are reported. | IRS FBAR page |
Timeline
- Before you move. List every property with its cost and value, review TFSAs, RESPs and Canadian funds, and decide whether to defer departure tax
- The move year. File the Canadian departure-year return with T1243, T1161 and any T1244, and a US dual-status return
- First full US year. FBAR, Form 8938 and Form 8621 where required, plus any treaty disclosures
- Later sales. Selling Canadian real estate as a non-resident brings its own Canadian clearance rules
Common questions
Do I pay Canadian tax on my house when I move to the US?
Canadian real or immovable property is one of the exceptions to the departure deemed disposition. A later sale while you are a non-resident has its own Canadian withholding and clearance rules.
What happens to my RRSP?
RRSPs are excluded from the Canadian deemed disposition. On the US side, eligible taxpayers receive the treaty deferral automatically under Rev. Proc. 2014-55, but the account is still reported on the FBAR and, where thresholds are met, Form 8938.
Should I keep my TFSA after moving?
The US does not treat a TFSA as tax-free, and the investments inside can raise PFIC reporting. Whether to keep it depends on the balance and timing, so review it before you become a US resident.
Can I defer Canada's departure tax?
Yes. Form T1244 lets you defer payment without interest until the property is sold. It is due by April 30 of the year after you leave, and the CRA requires security if the federal tax owing is more than CAD$16,500.
When does my US tax residency start?
It depends on whether you arrive with a green card or become resident under the substantial presence test. Publication 519 sets the start dates, and the arrival year is often a dual-status year.
Do I file Form T1161 if I only have bank accounts?
Cash and bank deposits are excluded from the CAD$25,000 test, as is personal-use property worth less than CAD$10,000. Other property, such as non-registered investments, is counted.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- CRA: Dispositions of property for emigrants of Canada
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS: Simplified procedures for Canadian retirement plans (Rev. Proc. 2014-55)
- IRS: Instructions for Form 8621 (PFIC)
- IRS: Report of Foreign Bank and Financial Accounts (FBAR)
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated October 21, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: First US tax year, TFSA and PFIC, Expanding a business to the US.
Plan your move year on both returns
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