For US citizens and green card holders in Canada, and Americans moving north, last checked October 31, 2026
RRSP, RRIF and Roth IRA for US Citizens Living in Canada
Retirement accounts on both sides of the border work differently from what most people expect. Here is how the IRS treats your RRSP and RRIF, how Canada treats your Roth IRA, and the mistakes that cost people the deferral.
Quick answer
Do US citizens in Canada pay US tax on RRSP growth?
Not while it stays in the plan, for most people. Under Rev. Proc. 2014-55, an eligible US citizen or resident is treated as having elected the treaty deferral for each RRSP and RRIF automatically, so income inside the plan is taxed in the US only when withdrawn. Form 8891 is obsolete and no Form 3520 is needed for the plan, but the accounts still go on the FBAR and, where thresholds are met, Form 8938. In the other direction, a Roth IRA keeps its tax-free status in Canada only if you file a one-time election with the CRA and stop contributing after you become resident (CRA).
RRSPs and RRIFs on your US return
| Question | Answer | Source |
|---|---|---|
| Is the treaty deferral automatic? | Yes, for an eligible individual: a US citizen or resident who has filed required US returns and has not reported the plan's undistributed income. It applies plan by plan, whether or not you lived in Canada when contributing | Rev. Proc. 2014-55, secs. 3 and 4 |
| Do I file Form 8891? | No. Form 8891 is obsolete as of December 31, 2014 | Rev. Proc. 2014-55, sec. 8 |
| Do I file Form 3520 for my RRSP? | No. The revenue procedure removes Form 3520 reporting for Canadian retirement plans | Rev. Proc. 2014-55, sec. 5.01 |
| FBAR and Form 8938? | Still required where the thresholds are met | Rev. Proc. 2014-55, sec. 5.01 |
| How are withdrawals taxed in the US? | Included in income under the normal annuity rules (section 72), subject to the treaty. The IRS example of a US citizen in Canada taxes the entire amount of each distribution; any US basis depends on your history | Rev. Proc. 2014-55, secs. 6 and 7 |
| Funds inside the RRSP? | PFIC filing is generally not needed for funds held inside a treaty pension such as an RRSP. See PFICs in Canada | PFIC guide |
Your Roth IRA in Canada
Canada treats a Roth IRA as a pension under the treaty, so in most cases no part of it is taxed in Canada, but only if you take the right steps (Treasury Technical Explanation, CRA Folio S5-F3-C1):
- File the election. A one-time, irrevocable election for each Roth IRA, filed with the CRA by your filing-due date for the year you became resident in Canada. Without it, income in the Roth IRA can be taxed in Canada each year.
- Stop contributing. A contribution made while resident in Canada splits the Roth IRA: the balance before it stays protected, but growth on the new money is taxed in Canada each year.
- Rollovers. A rollover from another Roth IRA or from a Roth 401(k) does not break the protection. A conversion or rollover from a traditional IRA does count as a contribution.
- Withdrawals. A distribution that would be tax-free in the US to a US resident is generally not taxable in Canada.
Contributing to a Roth IRA from Canada
A US citizen in Canada needs taxable compensation to contribute to an IRA. Wages excluded under the foreign earned income exclusion do not count (Publication 590-A), so someone who excludes all their wages has nothing to contribute from. Wages taxed in the US and offset with foreign tax credits are a different case. And even where the US allows it, a contribution while resident in Canada breaks the Canadian protection above.
Withdrawals by Canadian residents
For a Canadian resident who is not a US citizen, the treaty caps US tax on periodic pension payments, such as regular IRA or 401(k) withdrawals, at 15%, and the IRS treaty table notes that the 15% rate does not apply to a lump-sum payment (Treaty Article XVIII(2), IRS Treaty Table 1). US citizens are taxed by the US on all their income in any case, with credits for Canadian tax.
When to get help
Retirement accounts touch both returns at once, and a missed election or one contribution can change the result for years. A licensed US CPA, who also holds a Canadian CPA licence, can review both sides.
- You moved to Canada and never filed the Roth IRA election, or you are unsure whether it was filed
- You contributed to a Roth IRA or converted a traditional IRA after moving to Canada
- You previously reported RRSP income on US returns, which can affect eligibility for the automatic deferral
- You are planning withdrawals or a move back to the US
- FBARs or Form 8938 were missed for these accounts; see FBAR filing requirements
Common questions
Do I still need Form 8891 for my RRSP?
No. Form 8891 is obsolete as of December 31, 2014. Eligible individuals get the treaty deferral automatically under Rev. Proc. 2014-55.
Do I report my RRSP on the FBAR?
Yes. Rev. Proc. 2014-55 does not change FBAR or Form 8938 reporting.
Is my Roth IRA tax-free in Canada?
It can be, if you file a one-time election with the CRA by your filing-due date for the year you became resident and do not contribute while resident. Rollovers from another Roth IRA or a Roth 401(k) are allowed.
Can I contribute to my Roth IRA after moving to Canada?
The US may allow it if you have compensation that is not excluded under the foreign earned income exclusion, but Canada then treats the new money and its growth as taxable each year.
How are RRSP withdrawals taxed for a US citizen?
They are included in US income under the normal annuity rules, subject to the treaty, and Canadian tax on them is generally credited on the US return.
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.
- IRS: Rev. Proc. 2014-55 (Canadian RRSPs and RRIFs)
- CRA: Income Tax Folio S5-F3-C1, Taxation of a Roth IRA
- US Treasury: Technical Explanation of the 2007 Canada-US treaty protocol (Article XVIII)
- IRS: Publication 590-A (2025), contributions to IRAs
- IRS: Canada-US income tax treaty, Article XVIII
- IRS: Tax Treaty Table 1 (Canada)
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated October 31, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: US tax accountant in Surrey and Greater Vancouver, Cross-border pensions, TFSA on a US return, Moving from Canada to the US, FBAR filing requirements.
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