Hi,
I have contribution room available for my RRSP. I was wondering if I can open up an RRSP account as a US resident and contribute to my RRSP? Would there be any US tax issues either now or in the future? I’ve been reading some conflicting information that one should not contribute to RRSP as US resident but I’m not clear why.
Thanks,
Albert
Contributing to RRSP as US resident
Moderator: Mark T Serbinski CA CPA
Re: Contributing to RRSP as US resident
There is no tax law that prevents contributing to an RRSP while US resident.
However, MOST RRSP firm will not deal with new clients fir an RRSP, and even fewer will accept new money from a US resident, by their own rules. There are also SEC regulations which scare off most firms.
Also, since you would get no tax deduction in US, and, as a US resident, you are unlikely to have much income that is taxable in Canada, there is no tax benefit to making such a contribution, and all income in the RRSP will eventually be taxed in canada at least, and US if you still live there when you withdraw.
Better to focus on US-based tax shelters, like your 401(k), IRA, Roth, and residence.
However, MOST RRSP firm will not deal with new clients fir an RRSP, and even fewer will accept new money from a US resident, by their own rules. There are also SEC regulations which scare off most firms.
Also, since you would get no tax deduction in US, and, as a US resident, you are unlikely to have much income that is taxable in Canada, there is no tax benefit to making such a contribution, and all income in the RRSP will eventually be taxed in canada at least, and US if you still live there when you withdraw.
Better to focus on US-based tax shelters, like your 401(k), IRA, Roth, and residence.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: Contributing to RRSP as US resident
Okay that makes sense. My primary motivation for investing in RRSP is to avoid converting already existing CAD savings to USD and investing it in the US. But I totally understand the inability to deduct income on the contribution and the need for taxation afterwards would be the negative drawback of this action.
Re: Contributing to RRSP as US resident
If you are concerned about keeping Cdn currency in your investments, there are Cdn firms that trade on US markets.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: Contributing to RRSP as US resident
Thanks nelsona! Would you be able to suggest any such brokerage companies in Canada that allows non residents to open an account? I had Questrade margin account that I had to close when I moved to the US. Same for an Interactive Broker Canada account. Otherwise my only other choice is to convert from CAD to USD and have the money in a US brokerage to invest (perhaps in CAD companies that are tradable in the US exchange to maintain CAD hedge).
Re: Contributing to RRSP as US resident
Brokerage companies are forbidden from holding accounts for US residents, unless it is an RRSP. Forget that.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing