Question 1

Do I need to file a tax return in Canada when I move to the US?

Accepted Answer

Yes. You file a departure return (T1) for the year you leave, marked with your departure date. This triggers the deemed disposition rules, where CRA treats your capital property as sold at fair market value on your departure day. Capital gains tax may apply on accrued gains in non-registered accounts and private company shares. RRSPs, RRIFs, and RPPs are excluded from deemed disposition.

Question 2

Can I keep my RRSP when moving to the US?

Accepted Answer

Yes. Keep your RRSP in Canada. Under Article XVIII(7) of the Canada-US Tax Treaty, RRSP growth stays tax-deferred for US purposes. Under Rev. Proc. 2014-55, this deferral is automatic for eligible US residents. The old Form 8891 election is no longer required. You still report the account on FBAR and, if you exceed the threshold, on Form 8938. Do not collapse the RRSP: lump-sum withdrawals trigger withholding tax and you lose the tax-deferred growth.

Question 3

What happens to my TFSA when I move to the US?

Accepted Answer

Your TFSA stays open but you should stop making contributions. CRA charges 1% per month on contributions made as a non-resident. In the US, the IRS taxes TFSA income. The account is not recognized as tax-exempt. Any income, dividends, or gains inside your TFSA are fully taxable on your US return.

Question 4

What is a PFIC and why does it matter for Canadians moving to the US?

Accepted Answer

A Passive Foreign Investment Company (PFIC) is a foreign corporation where at least 75% of income is passive or at least 50% of assets produce passive income. Canadian mutual funds and ETFs are PFICs for US tax purposes. The US PFIC tax regime is punitive: interest charges on deferred gains calculated at the highest marginal rate, year by year. Sell Canadian-listed funds in non-registered accounts before you become a US tax resident.

Question 5

Do I need to file FBAR as a Canadian living in the US?

Accepted Answer

Yes, if the aggregate value of your foreign financial accounts (including your Canadian bank account, RRSP, TFSA, and RESP) exceeds USD $10,000 at any point during the year, you must file FinCEN Form 114 (FBAR) annually. The deadline is April 15 with an automatic extension to October 15. FBAR is filed separately from your tax return.

Question 6

What happens to my 401(k) or IRA when I move back to Canada?

Accepted Answer

Keep it in the US. Under the Canada-US Tax Treaty (Article XVIII), you can elect treaty deferral on your Canadian T1 return using CRA forms RC267 (401k), RC268 (IRA), or RC269 (Roth IRA). Without this election, CRA taxes annual growth as Canadian income. Do not cash out: withdrawal triggers US income tax, potential early-withdrawal penalties, and Canadian tax on the funds.

Question 7

How long is the health insurance waiting period when returning to Canada?

Accepted Answer

It varies by province. Ontario (OHIP) and British Columbia (MSP) each impose a 3-month wait after establishing provincial residency. Alberta (AHCIP) waives the wait for arrivals from another province but imposes a 3-month wait for international arrivals. Quebec (RAMQ) also imposes a 3-month wait. Get private bridge coverage for the waiting period from provincial Blue Cross plans, Manulife, or Sun Life.

Question 8

Can I import my US car to Canada?

Accepted Answer

It depends on where the vehicle was manufactured. US- and Canada-manufactured vehicles may be imported duty-free under CUSMA/USMCA if they meet eligibility criteria. Vehicles manufactured elsewhere may be subject to import duty of 6.1% for passenger vehicles. The vehicle must meet Transport Canada safety standards and be approved by the Registrar of Imported Vehicles (RIV). Check the RIV admissibility list before purchasing a US vehicle with the intent to import it.

Cross-Border Moving Checklist

Pre-Departure: Canada Side

US Arrival

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