RRSP x Traditional IRA x 401K CDN nonresident alien working in the USA

[Travel-ER-NURSE]

- I was advised to contribute to a traditional IRA or 401K in the USA as opposed to RRSP as the contribution would "count" to reduce CDN AND USA tax as opposed to RRSP which would only reduce tax owed in Canada. Does that sound right? If I earned USD80K and contributed 10K to 401k would my income go down to USD70K in BOTH USA and CAD?

- The other issue I have is that I started contributing to a 401K on the contract I started in December so I only have 1K contributed. Can I still contribute 5K to a private traditional IRA account (to max the 6K limit) now and benefit from the tax deduction? I've read mixed info about it. My employer did NOT match my 401K contribution.

- I'm going to owe at least 6K in federal US taxes for 2019, once that is paid here I will still owe about CAD1K, say I want to contribute to my RRSP, would Canada refund me anything even tho all taxes were paid in the USA and used as a tax credit here in CAD.

Thank you for all the help you provide here!!!!

[nelsona]

That is correct that a 401(k) (but not an IRA) would reduce taxes in both countries.

IRA contribution will only reduce US tax. It will however build a reserve in your IRA that will not be taxed in future when taking it out if a Cdn resident at that time.

Your RRSP contributions, assuming you have room, would be used first to reduce your taxable income, and then the US taxes would be applied as a credit, so, yes, you could contribute to your RRSP to reduce your Cdn tax to, say $5000, and then use all your US taxes to bring it to nearly zero. You could carryforward any RRSP contrib you make that would not be meeded this year, and use it later.