Residency Determination for RRSP

[jewel]

Hello,
If someone is a Canadian citizen entering the US on March 14 on a TN visa for employment, do they have an option to become a US resident starting June 31 (half year) or will they absolutly be considered a full year US resident?

We're trying to determine if she'll be able to make a contribution in her RRSP for 2010 on the Canadian income earned from January to March and elect to defer taxation subsequently. I read that contributions made while being a US resident would be come taxable in the US.

PS: She's not sure how long she'll stay in the US at this time.

Thanks

[nelsona]

You will be considered Cdn non-resident from March, and will file Cdn taxes accordingly.

For US, you will be considered resident from march, however you have the choice of considering yourself full-year resident for US tax purposes.

You do not have the choice of being US residnent from any date after March, since you were US resident since then and that is were ou lived.

RRSP Contributions made while resident of US are NOT any more taxable than if made by Cdn resident, if they are not deductible in US.

You are confusing the ability to contribute with the ability to defer. They are not related.

You should always defer.

Howevrr, since it will likley be beneficial to file full-year taxes in US, any RRSP contribution made for 2010 will not likley produce the tax savings that they normally would, so I would not bother makinga contribution this yeaar, and keep the contribution room for a future time, and focuss on your US tax shelters (IRA,Roth, home etc).

RRSP contribution in a year where you only work 3 months is not very effective.

[jewel]

Hi,
Thanks for the advice on the RRSP!

Sorry for asking again but i'm not sure I understand what you mean by : "RRSP Contributions made while resident of US are NOT any more taxable than if made by Cdn resident, if they are not deductible in US. "

I was reading a page describing that making a RRSP contribution after entering the US is not eligible to the tax deferral and becomes taxable in the US and wasn't able to find any info on this elsewhere.
http://www.canadatotwincities.com/rrsp-old.html

So in short the question is: Can someone contribute to the RRSP after becomign a US resident and still be legally allowed to defer taxation in the US on that portion?

Best

PS: Your forum is SO helpful. Huge kudos for taking the time.

[nelsona]

That info is well out of date and not correct.The word "old" should have clued you into that.

[jewel]

Thanks so much for confirming.