Taxes on Canadian GIC if I live in the US

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minster
Posts: 29
Joined: Mon Aug 15, 2016 11:35 pm

Taxes on Canadian GIC if I live in the US

Post by minster » Tue Aug 07, 2018 1:21 am

TLDR: Is income earned from a GIC in Canada considered purely interest income? Meaning there won't be any taxes held at source, and I just need to declare it on my 1040 using the NR4 I will receive? just like a regular bank account? Are there other complications I need to be aware of.

Hi all,

Context: Before I moved to the US, I closed my mutual fund investment account with RBC, but left my Visa and Savings Account open with them. As such, they charge me a monthly fee for my account, which would have been credited (mutli-product discount) if i had an investment. I just had the idea of starting a small GIC investment with them to avoid paying the monthly account fees.

Obviously if this will bring on other complications it's not worth it for me. But if they will just add the interest from the GIC to the NR4 they already send me than it's all good. Simplicity is the reasons why i closed my TFSA and non-RRSP investment accounts before moving.

Thanks in advance

nelsona
Posts: 15287
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Taxes on Canadian GIC if I live in the US

Post by nelsona » Tue Aug 07, 2018 7:25 am

This is not a problem. This is simple interest, which will not be taxable in Canada, only US, while resident.

And remember, unlike Canada, you do not need to declare the interest yearly, you can choose to only report the interest when it is paid out, at maturity.
Nelsona Non grata. Non pro. Search previous posts.

minster
Posts: 29
Joined: Mon Aug 15, 2016 11:35 pm

Re: Taxes on Canadian GIC if I live in the US

Post by minster » Fri Aug 10, 2018 2:24 am

Thanks Nelsona! I went ahead and opened a GIC account.

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