I'm about to move to the US (Washington state) for a few years (TN visa) and I have a few questions about handling matters.
To avoid crazy taxes, I want to make sure the CRA deems me a non-resident (to be honest, I'm a bit confused between the difference of a deemed non-resident under the US/Canada tax treaty and a non-resident).
1. To qualify as non-resident, I will get rid of my credit cards. But can I keep a (low/no interest) savings account open in Canada? I recall reading something about "for convenience" in the non-residency stuff.
2. I want to keep my Canadian RRSPs. Since I don't plan on staying in the US forever, I don't want to cash them out. I'll hire appropriate folks to file my taxes and complete the necessary IRS forms for Canadian assets and defer the tax on the RRSPs. However, from what I've read I need to have the RRSP account mail go to my US address otherwise the CRA could interpret this as having substantial ties if I have them directed to my mother's house, for example. However, I have been told that I can't change the address on my RRSP account to a US address. What should I do? How important is the address on the account?
Thanks in advance!
RRSPs and non-residency
Moderator: Mark T Serbinski CA CPA
1. All you need to do to be a Cdn non-resident is to live and work legally in US. period. No need to get rid of any financial ties, not even a house, as long as you have more of these in US that in Canada. As soon as you move, you will be non-resident, and will file a departure return next spring, which you can read about at the Emigrants guide on CRA website.
2. You cannot trade in your RRSP while in US without advising your broker that you are a US resident, and they will tell you if you can trade. I would be checking this now, so that you can move your RRSP to a broker that will work with you. To do anything else is against regulations of the US and the state you will be living in. do not spoof a Cdn address (not because it will make you Cdn tax resident, but becuase you are acting fraudulently with your broker)
All you need to do after that is file form 8891 every year to report RRSP and defer taxation. No need to hire a pro to do this.
2. You cannot trade in your RRSP while in US without advising your broker that you are a US resident, and they will tell you if you can trade. I would be checking this now, so that you can move your RRSP to a broker that will work with you. To do anything else is against regulations of the US and the state you will be living in. do not spoof a Cdn address (not because it will make you Cdn tax resident, but becuase you are acting fraudulently with your broker)
All you need to do after that is file form 8891 every year to report RRSP and defer taxation. No need to hire a pro to do this.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best