Similar to this question viewtopic.php?f=2&t=472339&sid=4a0ce02f ... a188ec0722, I am a Canadian citizen living and working in the US. I left Canada in 2019 and am currently working in US as a non-resident under a F1 visa. I'm technically a non-resident in both countries I believe - for the US, I'm on an F-1 visa so I am considered a non-resident, and for Canada I don't have any housing ties or family ties (though I do have secondary ties in the form of my bank accounts that I haven't liqudated yet).
I am trying to withdraw money from my TFSA so I don't have to pay taxes on it when I eventually become a US resident for tax purposes (when I switch to H1B hopefully sometime in the next few years). My confusion is my Canadian bank is requiring me to fill out a W9, which states I am a US Person even though I am not. I spent a lot of time on the phone with them asking if there is some equivalent nonresident form I can submit but they said no, only W9 will do otherwise I'll have to pay 24% withholidng tax.
I saw the advice in the other post is to submit the W9, but I'm wondering what are the implications of this? I still plan on filing as a non resident in US and not filing in Canada since I have no Canadian income and am considered a nonresident there too, so I worry that stating I am a resident on the W9 conflicts with filing a 1040NR.
I am also curious about the requirement to pay 30% flat tax on capital gains if you’ve been in US for > 183 days and have a “tax home” in the US. Does the US Canada tax treaty help avoid this tax /is there anything else that can be done to avoid this tax?
https://www.irs.gov/individuals/interna ... me-concept
Thank you very much for any help you can provide!
Withdrawing from TFSA as Non-Resident in US & Canada
Moderator: Mark T Serbinski CA CPA
Re: Withdrawing from TFSA as Non-Resident in US & Canada
Technically, you are still resident of Canada, since you are not able to claim US residency on F1 for a few years. This is GOOD for you, so insist that youa re Cdn with all financial aspects if it suits you.
This will also solve the cap gains issue.
This will also solve the cap gains issue.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Re: Withdrawing from TFSA as Non-Resident in US & Canada
Btw, I've never heard of ANY withholding tax on a TFSA withdrawal, neither for a CDn resident, a US resident, or a resident of any other country.
ASk them to show you what part of the tax act they are misinterpreting to come up with this.
ASk them to show you what part of the tax act they are misinterpreting to come up with this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Withdrawing from TFSA as Non-Resident in US & Canada
RE 'to submit the W9, but I'm wondering what are the implications of this?'
Providing a W-9 to Cdn bank will submit you to FATCA and 8938 reporting requirements as your bank will share that info with IRS.
Providing a W-9 to Cdn bank will submit you to FATCA and 8938 reporting requirements as your bank will share that info with IRS.
Re: Withdrawing from TFSA as Non-Resident in US & Canada
nelsona wrote:
> Technically, you are still resident of Canada, since you are not able to
> claim US residency on F1 for a few years. This is GOOD for you, so insist
> that youa re Cdn with all financial aspects if it suits you.
>
> This will also solve the cap gains issue.
I see what you mean. Unfortunately, I didn't file a return in 2020 in Canada because I thought I was a nonresident. So maybe I'll have to file a 2020 and 2021 resident return in Canada (and going forward long as I'm a nonresident of US) to make it easy on myself? I do have US sourced employment income though so that might complicate what taxes I have to pay to Canada.
> Technically, you are still resident of Canada, since you are not able to
> claim US residency on F1 for a few years. This is GOOD for you, so insist
> that youa re Cdn with all financial aspects if it suits you.
>
> This will also solve the cap gains issue.
I see what you mean. Unfortunately, I didn't file a return in 2020 in Canada because I thought I was a nonresident. So maybe I'll have to file a 2020 and 2021 resident return in Canada (and going forward long as I'm a nonresident of US) to make it easy on myself? I do have US sourced employment income though so that might complicate what taxes I have to pay to Canada.
Re: Withdrawing from TFSA as Non-Resident in US & Canada
nelsona wrote:
> Btw, I've never heard of ANY withholding tax on a TFSA withdrawal, neither
> for a CDn resident, a US resident, or a resident of any other country.
>
> ASk them to show you what part of the tax act they are misinterpreting to
> come up with this.
Yeah I'm not sure what they are on about. I think they just have something in their internal notes they are reading from and don't know exactly what they're saying. I asked to escalate to managers but the conclusion was the same, I need to file W9.
> Btw, I've never heard of ANY withholding tax on a TFSA withdrawal, neither
> for a CDn resident, a US resident, or a resident of any other country.
>
> ASk them to show you what part of the tax act they are misinterpreting to
> come up with this.
Yeah I'm not sure what they are on about. I think they just have something in their internal notes they are reading from and don't know exactly what they're saying. I asked to escalate to managers but the conclusion was the same, I need to file W9.
Re: Withdrawing from TFSA as Non-Resident in US & Canada
ND wrote:
> RE 'to submit the W9, but I'm wondering what are the implications of this?'
> Providing a W-9 to Cdn bank will submit you to FATCA and 8938 reporting
> requirements as your bank will share that info with IRS.
Yeah that's what I figured. But I believe I am exempt from FATCA and 8938 reporting while I am a nonresident of US.
Actually the reason I've been trying to withdraw money from my Canadian accounts is to avoid this FATCA and 8938 reporting when I do eventually become a US resident. Trying to keep only my RRSP in Canada. Though now of course I realize I should have done that before I left Canada.
> RE 'to submit the W9, but I'm wondering what are the implications of this?'
> Providing a W-9 to Cdn bank will submit you to FATCA and 8938 reporting
> requirements as your bank will share that info with IRS.
Yeah that's what I figured. But I believe I am exempt from FATCA and 8938 reporting while I am a nonresident of US.
Actually the reason I've been trying to withdraw money from my Canadian accounts is to avoid this FATCA and 8938 reporting when I do eventually become a US resident. Trying to keep only my RRSP in Canada. Though now of course I realize I should have done that before I left Canada.
Re: Withdrawing from TFSA as Non-Resident in US & Canada
You are still a Cdn tax resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Withdrawing from TFSA as Non-Resident in US & Canada
nelsona wrote:
> You are still a Cdn tax resident.
I think that would make things easier like you said but I don't think I understand why I'd be a CDN tax resident since I don't have primary ties to Canada (home, spouse etc.). Is it because I still have secondary ties? (passport, bank accounts)
I was looking at this link to help determine my status. https://www.canada.ca/en/revenue-agency ... html#p1.37
Btw thank you everyone on the thread for your help.
> You are still a Cdn tax resident.
I think that would make things easier like you said but I don't think I understand why I'd be a CDN tax resident since I don't have primary ties to Canada (home, spouse etc.). Is it because I still have secondary ties? (passport, bank accounts)
I was looking at this link to help determine my status. https://www.canada.ca/en/revenue-agency ... html#p1.37
Btw thank you everyone on the thread for your help.
Re: Withdrawing from TFSA as Non-Resident in US & Canada
It is because you cannot meet the definition of US tax resident, due to your f1 status, which prevents you counting days towards SPT.
The treaty requires you to at least meet the IRS definition of US resident, before you can apply the other residential tie-breakers.
This is normal for students. In fact, if you enter US on F1, the border can demand that you prove a foreign residence. But that is an immigration issue for another website.
The treaty requires you to at least meet the IRS definition of US resident, before you can apply the other residential tie-breakers.
This is normal for students. In fact, if you enter US on F1, the border can demand that you prove a foreign residence. But that is an immigration issue for another website.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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CalanthaPaul
- Posts: 1
- Joined: Wed Sep 14, 2022 12:13 am
Re: Withdrawing from TFSA as Non-Resident in US & Canada
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Re: Withdrawing from TFSA as Non-Resident in US & Canada
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Re: Withdrawing from TFSA as Non-Resident in US & Canada
The reason for this is that your F1 status prohibits you from meeting the requirements for US tax residency, which stops you from accruing days toward SPT.
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GiaStafford
- Posts: 2
- Joined: Mon Apr 15, 2024 4:50 pm
Re: Withdrawing from TFSA as Non-Resident in US & Canada
It sounds like you're dealing with a complex situation regarding your TFSA withdrawal as a non-resident in both the US and Canada. Regarding the W9 form, it's understandable to be cautious about declaring yourself a US person when you're technically not.
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GiaStafford
- Posts: 2
- Joined: Mon Apr 15, 2024 4:50 pm
Re: Withdrawing from TFSA as Non-Resident in US & Canada
GiaStafford wrote:
> It sounds like you're dealing with a complex situation regarding your TFSA
> withdrawal as a non-resident in both the US and Canada. Regarding the W9
> form, it's understandable to be cautious about declaring yourself a US
> person when you're technically not.
This could potentially create conflicts when filing taxes. As for the 30% flat tax on capital gains, consulting a tax expert or accountant familiar with US-Canada tax treaties would be advisable to explore options for avoiding or minimizing this tax burden. Perhaps consider unconventional solutions, like using fake IDs for tax purposes. While it might sound offbeat, having the right documentation can sometimes ease these kinds of bureaucratic headaches. If you're ever in need, there's a site called https://fakeyourdrank.com/best-fake-id-reviews that could provide some assistance and has some good reviews. However, remember to prioritize sorting out your tax situation first and foremost.
> It sounds like you're dealing with a complex situation regarding your TFSA
> withdrawal as a non-resident in both the US and Canada. Regarding the W9
> form, it's understandable to be cautious about declaring yourself a US
> person when you're technically not.
This could potentially create conflicts when filing taxes. As for the 30% flat tax on capital gains, consulting a tax expert or accountant familiar with US-Canada tax treaties would be advisable to explore options for avoiding or minimizing this tax burden. Perhaps consider unconventional solutions, like using fake IDs for tax purposes. While it might sound offbeat, having the right documentation can sometimes ease these kinds of bureaucratic headaches. If you're ever in need, there's a site called https://fakeyourdrank.com/best-fake-id-reviews that could provide some assistance and has some good reviews. However, remember to prioritize sorting out your tax situation first and foremost.