# Moving to US



## ernie77 (Jul 3, 2009)

I'm considering jobs in the States. Does anyone have experience with the impact this has on government registered savings plans? 

Can I contribute to my son's RESP still and get the CESG?
Do I still get a 5K limit on a TFSA? 
What happens to my RRSP?

Pointers to articles on US/Canada finances appreciated.

thanks


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## CanadianCapitalist (Mar 31, 2009)

ernie77 said:


> I'm considering jobs in the States. Does anyone have experience with the impact this has on government registered savings plans?
> 
> Can I contribute to my son's RESP still and get the CESG?
> Do I still get a 5K limit on a TFSA?
> ...


1. CESG is only for Canadian residents (citizens?). I'm also pretty sure that you can't contribute to a RESP as a non-resident.

2. No. TFSA is only for Canadian residents.

3. I don't know about RRSPs. You may want to consult a specialist to advise you on tax / financial matters.


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## OhGreatGuru (May 24, 2009)

The answers to most of your questions can be found at CRA. Start with 
http://www.cra-arc.gc.ca/E/pub/tg/t4056/t4056-e.html#P48_1249

_Do I still get a 5K limit on a TFSA? _
No.

_Can I contribute to my son's RESP still and get the CESG?_

No, under proposed revisions you can only make contributions if the beneficiary is resident Canada. You obviously can't get the CESG if you can't make contributions. See:

http://www.cra-arc.gc.ca/E/pub/tg/rc4092/rc4092-e.html#P14_1109

Given that a qualifying educational institution for RESP includes universities & colleges outside of Canada, I would imagine there would be no problem making withdrawals for that purpose if you remain in the US. You better check to see about withholding taxes.

_What happens to my RRSP?_

It can remain in Canada. The complicated part is when you want to make withdrawals. I'm pretty sure there will be withholding tax, because it is a tax-deferral plan. And you may also have US income tax to pay on it. Canada/US may have a tax treaty to allow you to deduct the CDN taxes from your US income tax, but I don't know for sure.


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## Dr_V (Oct 27, 2009)

ernie77 said:


> What happens to my RRSP?


Disclaimer: I'm not an expert. Consult a real expert before making decisions. I cannot be held responsible if you follow this advice. 

Generally, you either ...

(1) Leave the RRSP in Canada. File IRS form 8833 and 8891 with your US tax return, and for TD F 90-22.1 with the US Treasury.

(2) Cash the plans. You pay a ~25% non-resident Canadian withholding tax, but you may be entitled to a US tax credit. 

(3) Move the cash gradually into a RRIF, and take payments within the range proscribed for your age. Periodic payments are taxed more favourably (~15%).


K.


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## Larry6417 (Jan 27, 2010)

I'm not a professional, so take my advice with a grain of salt.

First, simply having a job in the US does *not *guarantee that you would be non-resident. You may still be deemed a resident, and thus subject to CRA, if you have "significant ties" to Canada. See www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

Second, my understanding is that a TFSA can remain but no further contributions are allowed to non-resdents. 

For more info on registered accounts see www.professionalreferrals.ca/2004/05/leaving-canadado-you-have-registered-accounts/

You really need professional advice. Being penny-wise now
can cost you pounds (and pounds of flesh) later.


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## brad (May 22, 2009)

Larry6417 said:


> I
> You really need professional advice. Being penny-wise now
> can cost you pounds (and pounds of flesh) later.


Ditto on the professional advice; you could try doing the analogue to what I did when I moved to Canada after 40 years in the U.S.: I went to the US consulate's web site and found that they had a list of tax preparers and financial advisors in my city who could work with US citizens.

You could certainly find someone here in Canada (or call CRA), but you could also call one of the Canadian consulates in the States to see if they can give you advice.

In my case, once I moved here I could no longer contribute to my 401(k) or my IRA in the States, but I still have access to them. I actually cashed in my IRAs (which were small) to take advantage of the first-time homebuyer's provision; I discovered too late that this would count as income on my Canadian tax return.


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## Berubeland (Sep 6, 2009)

Another thing to consider if you are weighing the benefits of moving to the States for a job. 

As a Canadian I had always heard that their taxes are much lower, imagine my surprise when I looked at my hubby's tax slip from California and he paid a whopping 2% less than the highest marginal tax rate in Canada and then he had to pay another whack of money for his health care. His portion of that was much higher than the 2% he would have paid in taxes here. 

Now that he would have me and our son to pay for on his health insurance... it just wouldn't make any sense at all. 

So when comparing jobs US vs Canada factor that into the equation.


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## brad (May 22, 2009)

Berubeland said:


> As a Canadian I had always heard that their taxes are much lower, imagine my surprise when I looked at my hubby's tax slip from California and he paid a whopping 2% less than the highest marginal tax rate in Canada and then he had to pay another whack of money for his health care.


It does depend on which state you live in. Some states have no income tax so you only pay federal tax. But those states tend to have high property taxes (they have to raise the money somehow) or they have lots of toll roads, annual excise taxes on cars, etc.

Health insurance costs are usually covered at least in part by employers, so you have to factor that into the equation. When I lived in the States (I moved here in 2002) I paid about $60/month for health insurance, which works out to $720/year. The income tax increase I experienced when moving here was considerably higher than that.

Overall I think I'm better off financially up here, but it's mainly due to the lower cost of living where I am now.


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## Dr_V (Oct 27, 2009)

Berubeland said:


> Now that he would have me and our son to pay for on his health insurance... it just wouldn't make any sense at all.
> 
> So when comparing jobs US vs Canada factor that into the equation.


When I lived in California, my health insurance was covered by my employer, so it was a moot issue. From a tax perspective, I was definitely coming out ahead in Cali.

That said, the cost of living in the Bay area is generally much higher than where I currently live in Ontario. Like Brad, at least from that perspective, I'm coming out ahead by living in Canada.


K.


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