Canadian RRSP for US Resident

penjoy777 · Post by **penjoy777** » Tue Jan 12, 2010 11:17 pm

I had left Canada 2 years ago and moved to US. I have been reporting all RRSP accounts on the US returns. Most of my RRSPs are GICs which will be maturing this year.
The bank (PC Financial) that I have RRSP GICs have informed me that since I am residing in US they would want me to withdraw the RRSP and close all accounts as I have moved to US.
IF I withdraw the RRSP, I am assuming I will be taxed. How can I avoid this? I had filed my Canadian return (final) when I left Canada. So how would it work now? Do I have to just file a return for this withdrawal as income?
Can I transfer this RRSP to another bank that would accept my US residency (TD, CIBC) to avoid this?

nelsona · Post by **nelsona** » Wed Jan 13, 2010 6:18 am

You will need to move them to a broker in canada that is licensed to deal with you in your stay. TD Waterhouse is equipped to deal with you.

penjoy777 · Post by **penjoy777** » Thu Jan 14, 2010 1:01 pm

Thanks. However, if I do plan to cash in the RRSP, what implications I am looking at? Do I file a return and pay taxes caused by cashing the RRSP?

nelsona · Post by **nelsona** » Thu Jan 14, 2010 1:10 pm

You pay flat 25% tax withheld from cashout. That is all for canada. If less is withheld you will need to send a cheque to CRA for the difference. No return is filed, unles syou make little other income in US, and then you could get some refund witha 216 return.

Then you report the withdrawal in US (line 16a) and the taxable portion on line 16b.

penjoy777 · Post by **penjoy777** » Wed Jan 27, 2010 9:22 am

When you say "little other income" does it mean extra income other than that I am earning under employment. I am currently employed and will be working in US. In parallel I wanted to withdraw my RRSP's in Canada. It seems for withdrawing RRSP I will have 25% of amount withheld but do I have fill a Canadian return?

nelsona · Post by **nelsona** » Wed Jan 27, 2010 12:34 pm

Any other income period. If you earn moe than, say 5000, your RRSP tax will not get any lower by special filing, so the 25% tax will be the best you can do, so there would be no point in special filing.