The latest interpretation is bad news for those who commute to work from Canada to the US. Since we aren't residents of the US, any growth in Roth 401K is taxible in Canada annually, and never taxable in US.
Correct? In particular, correct for USC residing in Canada?
If so, can one claim investment *losses* in Canada if one's Roth 401K loses money?
I am also concerned that the standard 401K | RRSP situation may be interpreted the same way. If you must be a resident of the US for CCRA to recognize your 401K contributions and allow a deduction ( up to RRSP limit ) then cross border commuters are screwed. The US won't recgonize RRSP contributions and CCRA won't recognize 401K contributions.
Has an equivalent technical explaination for standard 401Ks been made public?
Roth rules: Live in Canada, commute to work in USA
Moderator: Mark T Serbinski CA CPA
Your interpretation of Roth rules is correct. You would be able to claim yearly losses. OR you can defer tax on gains until you withdraw. We'll see if you can do both.
For 401(k) however the new protocol DOES protect cross-border workers. That was the whole point. 401(k) contributions by Cdn residents working in US are covered. RRSP contributions made by US residents or citizens working in Canada are covered. The treaty language is pretty clear on this.
And it ALSO protects transferees for 5 years: they can have a 401(K) while working in Canada or an RRSP while working in US.
Note though, that the RRSP MUST be an employer-sponsored one, not your own. Similarly only 401(k) 403(b) are covered, not IRAs.
For 401(k) however the new protocol DOES protect cross-border workers. That was the whole point. 401(k) contributions by Cdn residents working in US are covered. RRSP contributions made by US residents or citizens working in Canada are covered. The treaty language is pretty clear on this.
And it ALSO protects transferees for 5 years: they can have a 401(K) while working in Canada or an RRSP while working in US.
Note though, that the RRSP MUST be an employer-sponsored one, not your own. Similarly only 401(k) 403(b) are covered, not IRAs.
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
Thanks.
I find it strange that an employer sponsored Roth 401(k) is not treated the same way as a standard employer sponsored 401k in terms of residency requirements.
That is your interpretation, right?
By the way, how would I elect to the CCRA to defer tax on gains ( procedurally )?
A statement to that effect, or is there or will there be a form?
I find it strange that an employer sponsored Roth 401(k) is not treated the same way as a standard employer sponsored 401k in terms of residency requirements.
That is your interpretation, right?
By the way, how would I elect to the CCRA to defer tax on gains ( procedurally )?
A statement to that effect, or is there or will there be a form?
Many are doing this right know; it's called a protective claim, using the same section as RRSP holders in US use.
A Roth 401(k) is a Roth.
A Roth 401(k) is a Roth.
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