RRSP Contribution non-resident of Canada and US Resident Al

nabstar · Post by **nabstar** » Tue Apr 12, 2016 10:48 am

Hey Guys, Quick questions.

Individual is US resident alien and Canada non resident . He does have some Canadian source income. Can he deduct RRSP in Canada? I presume yes. Anybody aware of the rules for US? Or can point me in right direction. I think it depends on the type of RRSP?

nabstar · Post by **nabstar** » Tue Apr 12, 2016 10:48 am

By RRSP - I mean RRSP contributions.

nelsona · Post by **nelsona** » Tue Apr 12, 2016 11:42 am

First, you need to have a willing RRSP manager. Most, if not all, will not acceot new monies from US residents.

Second, what type of "source income" would this person be getting that is both not withheld at source, and is so great that it would result in a tax deduction. Rental income would be the only one that comes to mind, and CCA is a more effective deduction.

Third, if such substantial income exists, it is also being reported on the US tax return, so any reduction is Cdn tax would be eaten up by IRS due to reduced foreign tax credit.

Fourth, It is very complicated and difficult to extract undeducted RRSP money after a few years in the plan.

Better to fund your US home, your US roth, or some other tax efficient investment that.

nelsona · Post by **nelsona** » Tue Apr 12, 2016 11:43 am

... and save the RRSP contribution for when the person returns to Canada.

nabstar · Post by **nabstar** » Tue Apr 12, 2016 12:06 pm

Thanks Nelsona. He already made the contribution in 2015. I presume he didnt inform them he is a non-resident. Is he onside to deduct the 2015 contribution in US? Or are there restrictions?

nelsona · Post by **nelsona** » Tue Apr 12, 2016 12:17 pm

Again, what income do your (sorry, he) have. Why waste the contribution? Does he even have to file a Cdn return?

He CANNOT deduct RRSP contributions in US unless they are made through payroll deductions at work.

You are giving out information is drips and drabs here.