RRSP & RRIF
Article XVIII deferral is automatic since 2014, so there is no election to make and Form 8891 is gone. The account is still reported — on the FBAR, filed separately with FinCEN, and on Form 8938 where the thresholds are met.
Convention 1980 · IRS × CRA
The US–Canada tax treaty, for Americans in Canada.
Snowbird, dual citizen, or just paying tax in both places?
We thread the 1040 needle so the CRA refund doesn't double-tax.
Canada-US Convention 1980 (and the five subsequent protocols) is the most-amended US treaty in force. RRSPs no longer need Form 8891 — but TFSAs are still a trap. The deferral needs no election and no Form 8891 — what remains is reporting. The TFSA's Form 3520 / 3520-A work is detected and routed to a CPA.
Free PFIC scan · Pay to generate the draft package · Mapped Forms 8621 / 8938 / FBAR / 1116 / 8833
This desk covers the treaty only. For Canadian accounts, investments and pensions, see the Canada country desk.
What we handle for Canadian residents
The three things that bite US citizens in Canada.
TFSA pitfall
Commonly analysed as a foreign grantor trust — Form 3520 / 3520-A territory, and not tax-free on the US side. We flag it before you contribute and detect it if you already hold one; the trust forms themselves are out of scope for the self-serve package and are routed for professional review.
Article XXIV credit
Federal + provincial tax (Ontario, BC, Quebec abattement) all roll into Form 1116. Quebec residents get the abatement reconciled separately.
Direct answer
Does the US–Canada treaty mean I do not file a US return?
No. Every US income-tax convention carries a saving clause that lets the United States tax its own citizens and green-card holders as if the treaty had not entered into force, with a short list of exceptions. The 1980 convention with Canada decides which country taxes an item first and how double taxation is relieved — usually as a credit on the return you still have to file. Three things it does not do:
It does not remove the filing requirement
The saving clause keeps a US citizen in Canada inside the US system. Relief for Canadian tax arrives on Form 1116 (or, for earned income, Form 2555) — on a return, not instead of one.
It does not decide PFIC status
Whether a Canadian fund or ETF is a passive foreign investment company is a question of US domestic law (IRC §1297), and a treaty does not displace it. A fund inside a local wrapper still reaches Form 8621.
It does not replace the FBAR or Form 8938
The FBAR is a Bank Secrecy Act report to FinCEN and Form 8938 is a return attachment under IRC §6038D; neither is a treaty matter, and Canada's own foreign-asset filings do not satisfy either.
Filing from Canada
What the treaty leaves on a return filed from Canada.
The convention changes how items are taxed; it does not shorten the list of what is reported. A US citizen resident in Canada typically files:
- Form 1040 on worldwide income, with Schedule B's foreign-account questions answered.
- Form 1116 for the credit on Canadian income tax — or Form 2555 for earned income, where the exclusion is the better fit.
- The FBAR when non-US accounts together exceeded the threshold at any point in the year, and Form 8938 at its own, higher thresholds.
- Form 8621 for each non-US fund, and Form 8833 only where a treaty position overrides the default.
Missed years change the order: the catch-up route comes first, then the current return.
Other treaty desks
Same workflow, different bilateral convention.
SwitzerlandConvention 1996DenmarkConvention 1999ItalyConvention 1999GermanyConvention 1989United KingdomConvention 2001FranceConvention 1994AustraliaConvention 1982
Not sure which desk applies? Every country desk in one place.
Canada treaty · FAQ
What US citizens in Canada ask us most.
- Do I still report my RRSP to the IRS?#
- Yes. Tax deferral on an RRSP/RRIF has been automatic under Article XVIII since 2014, so there is no election to make and Form 8891 is no longer filed — but the account is still reportable on Form 8938 and on the FBAR. Deferral of tax is not exemption from reporting.
- Is my TFSA a problem for US taxes?#
- It can be. A TFSA is commonly analysed as a foreign grantor trust, which can put it in Form 3520 / 3520-A territory — and it is not tax-free on the US side. Whether a particular TFSA is a trust for US purposes turns on how it was established, so we do not assert it as settled: we flag it before you contribute, detect it if you already hold one, and route the Form 3520 / 3520-A filings to a CPA for preparation.
- Can I credit both federal and provincial Canadian tax?#
- Yes. Under Article XXIV, federal plus provincial tax (Ontario, BC, and the Quebec abatement) all roll into Form 1116. Quebec residents get the abatement reconciled separately.
Authorities cited
- US–Canada Income Tax Treaty — Convention between the United States and Canada (signed 1980), as amended by its five Protocols
- U.S.–Canada Totalization Agreement — U.S.–Canada Social Security (Totalization) Agreement
- IRS Form 1116 — About Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)
- IRS Form 8833 — About Form 8833 — Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)
- IRS Form 3520 — About Form 3520 — Annual Return To Report Transactions With Foreign Trusts
Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.
Canada guides that go deeper
- The TFSA and US tax: why “tax-free” stops at the borderA TFSA is the most-recommended savings account in Canada and one of the worst places for a US citizen to hold anything. Canada exempts it; the United States does not recognise the wrapper at all.Read guide →
- RRSPs and US tax: the deferral is automatic, the reporting is notThe RRSP is the one Canadian wrapper the United States genuinely respects. Since 2014 the deferral is automatic and Form 8891 is gone — which is exactly why people now under-report it.Read guide →
- The FHSA and US tax: a first-home account the IRS has never heard ofCanada's First Home Savings Account gives you an RRSP-style deduction going in and a TFSA-style tax-free withdrawal coming out. A US citizen gets neither: no deduction, income taxed as it arises, and an open question about whether the account is a foreign trust.Read guide →
- Canadian mutual funds, ETFs and the PFIC rulesA TSX-listed ETF is the most ordinary thing a Canadian investor can own, and one of the clearest PFIC cases there is. What changes the outcome is not the fund — it is which account it sits in.Read guide →
- Wealthsimple for US citizens: what the account holds, and what the IRS seesWealthsimple will open an account for a US citizen living in Canada — and then, by default, fill it with the two things the IRS treats worst: a Canadian-listed ETF, and a TFSA to hold it in. Here is how to read your own account before you file.Read guide →
- Questrade for US citizens: one account, PFICs and non-PFICs side by sideQuestrade gives a US citizen in Canada access to both the TSX and the US exchanges — which is exactly why it is the broker where a portfolio most often ends up half PFIC and half not. The listing decides, not the broker.Read guide →
Atamatax · run your Canada return
Free on-screen draft. Pay to generate the PDF package.
Scan your brokerage, see your PFIC count, review the forms with the right Canada treaty positions attached. You pay when you generate the draft PDF package. It maps supported figures to IRS forms and identifies items you or your CPA still need to complete.
What you walk out with
- · Form 1040 + schedules B, D, 1, 2, 3
- · One Form 8621 per PFIC (up to 25 per return)
- · Form 8938 (FATCA) when thresholds hit
- · FinCEN 114 (FBAR) threshold check and separate-filing guidance
- · Form 1116 with Canada tax credit allocated
- · Form 8833 when you take a treaty position