Did You Know
That if you are a U.S. citizen residing in Canada, you should be aware that there are special U.S. filing requirements if you hold an interest in either a Canadian RRSP or a RRIF.
In general, to avoid being taxed on the income earned in your registered plan until it is distributed to you, a special election must be made under the Canada-US. Treaty. This can be achieved by filing IRS Form 8833 with your U.S. tax return. You must also report the balance in each RRSP or RRIF at the end of the tax year. The filing requirements are more complex if you have received a distribution from the plan during the year.
This election, as well as the additional information, must be filed by the due date for filing your U.S. personal tax return for the year (including extensions). For U.S. citizens living in Canada, the due date is June 15th. If you file for an extension, the due date is August 16th. However, if a valid Treaty election is not filed on time, any income accrued in your RRSP must be reported on your U.S. tax return.
If you find yourself in this situation, itís recommended that you consult a tax specialist to make sure you are in compliance with the rules. Contact Keith Anderson, BCom, CPA, CA-IT, CITP at (780) 447-5830 if you need advice.