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I'm a Canadian living and working in the US, so I file and pay income taxes in the US, and am a non-resident of Canada for tax purposes. I am aware of my filing obligations to the IRS, but I have some questions about filing/paying to the CRA:

  • I have some interest income on a regular savings account. No taxes were withheld. Am I correct to believe I don't have any filing or payment obligation to the CRA due to the tax treaty with the US?
  • I have a TFSA that earned a tiny amount of interest income. If I fill in this form, it tells me I owe 25% income tax on it. Can that be right? Does TFSA really lose CRA tax-free status by becoming a non-resident? http://www.cra-arc.gc.ca/partxiii-calculator/ (Note: I am aware I will owe the IRS.)
  • I also have a Canadian brokerage account which contained publicly-traded US ETFs. There were no capital gains, but I did receive dividends. These dividends were automatically withheld at 15%, paid to the US (not Canada). Do I owe anything to Canada?

I spoke to an accountant who recommended I fill out a "simple" form for the dividends, but I have had no luck locating any such form. Any help would be appreciated.

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The interest in the savings account may be too small to report, but I'm not sure what the threshold is.

You should tell your banks you have moved and need to be treated as a US tax resident. That will prompt them to start sending you the US forms you need (1099-DIV etc).

There are certain steps you need to take on moving out of Canada, include a 'deemed disposition' of your Canadian assets.

If you hold sufficient money overseas (Canada), you will need to report this on the FBAR.

Be wary of owning Canadian mutual funds or ETFs outside of an RRSP. There is a punitive class of investments called PFICs that apply to those.

The TFSA, RESP, and RDSP are not recognized by the IRS and the advice I've received is to close them. You won't lose the contribution room you had in the TFSA. RRSPs are fine, and may be a good place to move your money if you do it before declaring US residence to the bank. Otherwise, they won't allow US residents to contribute to an RRSP, even if there is room.

The withholding they did was because they assume you are a Canadian tax resident. Once you inform them otherwise, they will no longer withhold on the US ETFs, but will on the Canadian ones (should be 15% once you send in a special form).

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