Can I transfer RRSP assets to a U.S. retirement plan? (2024)

FAQs

Can I transfer RRSP assets to a U.S. retirement plan? ›

Unfortunately, RRSP assets cannot be rolled over to a U.S. IRA. If you withdraw funds from your RRSP, the entire amount of the withdrawal is subject to Canadian withholding tax.

A tax-free rollover of your RRSP/ RRIF into a retirement plan in the U.S. is not permitted. Therefore, any transfer is considered a distribution under Canadian tax law and subject to Canadian non-resident withholding tax.

Our response:

Canadian citizens that have become non-residents can continue to hold RRSPs after leaving Canada.

If you transfer funds from a Registered Retirement Savings Plan (RRSP) to buy back service, you must complete Area 1 of the Canada Revenue Agency T2033 form titled "Direct transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e)" and forward it along with the Service buyback form ( PWGSC - TPSGC ...

Canadian RRSP Earnings are taxable

Since the IRS and US state revenue agencies do not view RRSP's as IRA's, all of the yearly earnings in an individual's Canadian RSP accounts are taxable and are required to be reported annually. For all those asking, “Are RRSPs taxed?” Unfortunately, they are.

Because CPP is a "member-contributed plan" it will always be yours, regardless of where you live in the world. If you paid in at least 1 CPP contribution, you are entitled to a benefit. OAS, on the other hand, comes out of the general tax revenues.

You are able to transfer an RRSP to a different financial institution by authorizing the transfer of your funds. You can initiate the transfer through the receiving financial institution. One or both of the financial institutions involved may charge you a transfer fee.

Recipients of foreign inheritances typically don't have a tax liability in the United States. And, if you're sending your own money from a foreign bank account to a domestic one, you won't have to pay taxes on the transfer.

In Canada, the current withholding tax rates for withdrawing funds from an RRSP are as follows: 10% on amounts up-to $5,000; 20% on amounts over $5,000 up-to and including $15,000; and. 30% on amounts over $15,000.

Can you transfer Canadian RRSP to 401k? ›

Unfortunately, RRSP assets cannot be rolled over to a U.S. IRA. If you withdraw funds from your RRSP, the entire amount of the withdrawal is subject to Canadian withholding tax. The rate of withholding tax on lump-sum withdrawals varies from 10% for amounts lower than 5,000$ to 30% for amounts exceeding 15,000$.

Yes, you are free to transfer your RRSP to another financial institution at any time, however they may impose a fee between $50 to $150 for transferring funds out of your account. Some institutions will reimburse those fees when you transfer an account to them.

If you transfer an investment from your RRSP to your TFSA, you will be considered to have withdrawn the investment from the RRSP at its FMV . That amount will be reported as an RRSP withdrawal and must be included in your income in that year.

Canadian citizens who live and work in the United States may contribute to an RRSP as long as they keep within the contribution threshold. Canadians may keep their RRSP intact when they move to the United States and let the income grow tax-deferred for Canadian tax purposes.

Form 8938 aka FATCA (Foreign Account Tax Compliance Act) is similar to the FBAR and requires US taxpayers who have ownership of foreign pension plans such as an RRSP to report the information to the IRS directly on Form 8938. *See Form 8938 Instructions for more detail about foreign pension reporting.

An RRSP can be considered the Canadian equivalent of the American 401(k), and vice versa. Both are retirement plans designed to encourage savings with similar tax benefits.

When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax).

You can make a withdrawal from your RRSP any time¹ as long as your funds are not in a locked-in plan. The withdrawal, however, is subject to withholding tax and the amount also needs to be included as income when filing your taxes. There are situations in which tax-deferred withdrawals can be made from your RRSP.

Yes, US citizens can maintain or open new RRSP accounts while living abroad, provided they have earned income that is subject to Canadian tax. It's essential, however, to consider the tax implications in both Canada and the US.