RRSPs - Lifelong Learning Plan payback

CeriseRose · Post by **CeriseRose** » Fri Jan 20, 2006 6:11 pm

First, I did a search and didn't find anything related to this; my apologies if it's been asked before. If it has, can someone please post a link? Thanks!

I'm a Canadian citizen, and moved to the US in July 2005 to be married to a US Citizen. I will be filing Canadian taxes for 2005 up to my leaving date and will be filing with my husband for the balance of the year as a resident of the US.

In 2004 before I was engaged, I withdrew $10,000 from my RRSPs under the Lifelong Learning Plan (they defer the tax and you repay the balance in a set number of years). I'm familiar with the similar program, the "Home Buyers Plan" as I withdrew and repaid in full under that plan in prior years. The difference is I'm now a resident of the US, not Canada and therefore not filing Canadian taxes after 2005.

Paperwork from Revenue Canada indicates that I have to repay $0 in 2005...my question is, if I'm not filing Canadian taxes because my residency has changed, what is my responsibility toward repaying the LLP? I know this won't affect 2005 but if it will affect later years I would like to know and keep it on the radar. In addition, is this anything that needs to be addressed in the US taxes? I know that my current RRSPs need to be declared (I believe it's form 8891), but I'm not sure if the LLP "outstanding balance" needs to be acknowledged in the US paperwork, or how/what forms to use.

Any help is much appreciated! Thanks!

nelsona · Post by **nelsona** » Fri Jan 20, 2006 10:58 pm

The required repayment ($0) in 2005 was based on you remaining in Canada.
Now that you have left, you must either pay it back in FULL by may 1, or include it in your Cdn departure return. it WILL affect 2005 taxes. You need to be looking at the "Emigrants" guide rom CRA to see how your 2005 tax return will be different than the past.

This is a non-event in US. All you have to do is report the fact that you have an RRSP on Form 8891.

CeriseRose · Post by **CeriseRose** » Fri Jan 20, 2006 11:57 pm

nelsona wrote:The required repayment ($0) in 2005 was based on you remaining in Canada.
Now that you have left, you must either pay it back in FULL by may 1, or include it in your Cdn departure return. it WILL affect 2005 taxes. You need to be looking at the "Emigrants" guide rom CRA to see how your 2005 tax return will be different than the past.

This is a non-event in US. All you have to do is report the fact that you have an RRSP on Form 8891.

Thank you SO much. That's exactly what I needed to know.