Tax Issues For Americans Moving To Canada: A Cross-Border Planning Guide

A US citizen takes a job in Toronto and, in the first week, opens a Canadian bank account and a TFSA. Two years later an accountant finds that the TFSA was never reported to the IRS, the Canadian ETFs inside it are PFICs, and the Roth IRA treaty election was never filed. None of it was deliberate. All of it was avoidable.

The tax issues for Americans moving to Canada differ from those of any other newcomer, because the United States taxes its citizens wherever they live. An American moving to Canada becomes taxable in Canada on worldwide income while remaining a US taxpayer on the same income. The Canada–US tax treaty coordinates the two systems, but only if you plan for the overlap.

Here is what our cross-border team at Altro LLP reviews with clients before and after the move.