Quick answer
- You can keep your 401(k) and IRA. Canada does not tax the growth while you live there, and the US keeps treating them as retirement accounts.
- Roth IRA needs one form. To keep it tax-free in Canada, file the treaty election with the CRA for your first Canadian tax year and stop contributing.
- An RRSP works for US citizens. Since 2014 the IRS defers RRSP growth automatically, with no Form 8891 or 3520. The deduction only helps on your Canadian return.
- You usually have no RRSP room in your first year. Room is 18% of the previous year's Canadian earned income, up to C$33,810 for 2026 and C$35,390 for 2027.
Each account after you move: Canada vs US treatment
US citizens keep filing a US return after moving, so every account has to work in both systems. This table assumes you are a US citizen and a Canadian tax resident.
| Account | Canada (CRA) | United States (IRS) | What most people do |
|---|---|---|---|
| 401(k) / 403(b) | Growth not taxed while you live in Canada. Withdrawals are taxed as income, with a foreign tax credit for US tax. | Still tax-deferred. Withdrawals taxed on your 1040; 10% additional tax before age 59½. | Usually leave it in place. Confirm your plan and brokerage still serve a Canadian address. |
| Traditional IRA | Same as a 401(k): no tax until you withdraw. | Same as a 401(k). | Usually leave it in place. |
| Roth IRA | Tax-free only if you file a one-time treaty election with the CRA and make no contributions after you become resident. | Qualified withdrawals stay tax-free. | File the Article XVIII(7) election by the filing due date for your first Canadian tax year. Stop contributing. |
| RRSP (new, Canadian) | Contributions deductible; growth tax-deferred. | Contributions not deductible. Growth is automatically tax-deferred (Rev. Proc. 2014-55). Report on FBAR / Form 8938. | Usually worth it: it cuts Canadian tax, which is normally the higher of the two. |
| TFSA (new, Canadian) | Tax-free. | Not recognized by the treaty: income is taxable on your 1040, and reporting requirements may apply. | Many cross-border advisers tell US citizens to skip it. Get advice before opening one. |
| FHSA (new, Canadian) | Deductible (up to C$8,000/yr, C$40,000 lifetime) and tax-free for a first home. | Not covered by the treaty; income is taxable on your 1040 and US trust treatment is unsettled. | Get cross-border advice before opening one. |
| RESP (education savings) | Tax-deferred growth plus 20% federal CESG match (up to C$500/yr per child); withdrawals taxed in the student's hands. | Exempt from Form 3520/3520-A under IRS Rev. Proc. 2020-17, but annual income and grants remain taxable on a US subscriber's 1040. | If one spouse is not a US person, make that spouse the sole RESP subscriber. |
The Canada–US tax treaty (Article XVIII) is what lets each country defer tax on the other country's retirement plans. Accounts the treaty does not cover, like the TFSA and FHSA, get no protection on the US side.
Roth IRA: the one form you should not miss
Canada does not have a Roth-style account in its tax law, so without the treaty election the CRA can tax the income earned inside a Roth IRA every year.
- What to file: a one-time election under Article XVIII(7) of the treaty, sent to the CRA's Competent Authority Services Division in Ottawa.
- Deadline: on or before your filing due date for the tax year you became a Canadian resident (usually April 30 of the next year; Budget 2026 proposes May 15 starting with the 2027 tax year).
- Do not contribute after you move. The CRA treats any contribution made while you are a Canadian resident as splitting the account: growth after that point becomes taxable in Canada each year.
Source: CRA Income Tax Folio S5-F3-C1, Taxation of a Roth IRA.
Opening an RRSP as an American
An RRSP is Canada's main retirement account. For US citizens it is generally worth using because Canadian tax rates are usually higher than US rates, so the Canadian deduction saves real money while the US foreign tax credit covers most of the US side.
- US treatment: under IRS Rev. Proc. 2014-55, US citizens are treated as having elected to defer US tax on RRSP growth until withdrawal. Form 8891 is obsolete and Forms 3520 / 3520-A are not required for RRSPs. FBAR and Form 8938 still apply.
- No US deduction: RRSP contributions reduce Canadian tax only. They are not deductible on your 1040.
- Deadline: contributions made by March 1, 2027 count toward the 2026 tax year.
How much RRSP room you get
| Situation | RRSP room |
|---|---|
| Your first year as a Canadian resident | Usually C$0, because room is based on the previous year's Canadian earned income |
| Second year, after earning C$100,000 in Canada in your first year | C$18,000 (18% of C$100,000) |
| Maximum for the 2026 tax year | C$33,810 |
| Maximum for the 2027 tax year | C$35,390 |
Dollar limits from the CRA's RRSP limits table. Pension adjustments from a workplace pension plan reduce your room. Your exact room is on your CRA Notice of Assessment.
Is a Home Buyers' Plan withdrawal taxed in both countries?
In Canada, not if you stay inside the limit. The CRA currently allows up to $60,000, with no withholding at or under that amount, repaid over 15 years. A first withdrawal in 2026 starts repayment in 2031. Anything above $60,000, and any skipped required repayment, is income that year. The United States has no Home Buyers' Plan exception. The IRS says a US citizen or resident with an RRSP includes distributions in US income (IR-2014-97), and no IRS page treats a Home Buyers' Plan withdrawal differently, so do not assume it is tax-free on the US return. Check with a cross-border tax professional before you withdraw. A one-time IRA cash-out is already covered under "Taking money out after you move" below: a US citizen reports it on the 1040. The 15% rate there is a different case.
Moving a 401(k) or IRA into an RRSP
Canadian law lets a resident move a lump-sum withdrawal from a 401(k) or traditional IRA into an RRSP without using RRSP room (paragraph 60(j) of the Income Tax Act). It is rarely the best choice because the withdrawal is still a taxable event in the US first:
- The withdrawal is taxed on your US return, plus the 10% additional tax if you are under 59½.
- On the Canadian side, you include it in income, then deduct the amount you put into the RRSP in the same year or within 60 days after year-end. You claim a foreign tax credit for the US tax.
- Roth IRA money does not qualify.
It can make sense in narrower cases, for example after age 59½ or when you want to consolidate accounts before giving up US status. Have a cross-border accountant run the numbers first.
Taking money out after you move
- Canada taxes withdrawals from a 401(k) or traditional IRA as regular income in the year you take them, and gives a foreign tax credit for US tax paid.
- US citizens still report the withdrawal on their 1040 at normal US rates. The treaty's special rules decide which country gives the credit for what, so both returns usually need to be prepared together.
- Non-citizens (for example, Canadians returning home or green card holders who gave up US residence) are taxed by the US as non-residents: 15% withholding on periodic payments under the treaty with Form W-8BEN, and 30% on lump sums by default.
If I leave, do they tax the house and the pensions on the way out?
Not just because you moved. The 2025 instructions apply the US exit tax if you give up citizenship or end long-term residency: a green card in at least 8 of the last 15 years. You are covered if average US income tax for the prior five years is over $206,000, net worth is $2 million or more, or you skip the five-year certification. Most property is treated as sold the day before, after an $890,000 reduction for 2025. Specified tax-deferred accounts are treated as distributed instead. Claiming Canadian treaty residence and telling the IRS can start that date. Canada's departure tax is a separate deemed sale, and it leaves out Canadian real estate and an RRSP. A US house stays in. Check with a cross-border tax professional. The 2026 IRS instructions were still a draft.
Reporting you still owe the IRS
| Form | Who files | Includes |
|---|---|---|
| FBAR (FinCEN 114) | US persons whose non-US accounts total more than US$10,000 at any time in the year | Canadian bank accounts, RRSP, TFSA, FHSA |
| Form 8938 (FATCA) | Single filers living abroad with foreign financial assets over US$200,000 at year-end or US$300,000 at any time | Same accounts, filed with your 1040 |
| Form 8891 | No one | Obsolete since 2014 for RRSPs and RRIFs |
One more trap outside retirement accounts: Canadian mutual funds and ETFs held in a regular or TFSA account are usually PFICs for a US person (Form 8621), which are taxed harshly. Individual stocks or US-listed ETFs avoid that.
Before you change your address, ask your US brokerage whether it still serves clients living in Canada. Many restrict trading or new purchases for Canadian residents because of securities rules.
Is a Canadian ETF in my RRSP or TFSA a PFIC?
The IRS does not list Canadian funds. Form 8621 applies to a foreign corporation with at least 75% passive income, or at least 50% passive assets. You generally file it for each one you hold. Part I of the form is not required when you hold that interest through a treaty foreign pension fund; other parts can still apply. An RRSP can be that arrangement. A TFSA cannot, and neither can a fund in an ordinary account. Whether a given ETF is a corporation or a trust is in the fund's documents. No US regulator page says a broker must freeze the account for a Canadian address. Ask the firm in writing before you move, and ask a cross-border tax professional before you call a fund a PFIC.