Crossborder Implications of US Accounts

Taxable Accounts

Based on my experience, you cannot hold a taxable account with a US brokerage as a resident of Canada. I talked to many different brokerages (including Vanguard, Fidelity, TD Ameritrade and TIAA) and they all said the same thing. Thus, I opened a US dollar account at a Canadian brokerage and transferred our taxable holdings there. Note that there are definitely some crossborder implications of what you should hold in a Canadian taxable account as a US citizen — for more on that, and on other crossborder considerations of Canadian accounts, please visit this page.

Note: in all of the account types below (Traditional and Roth IRA / 401(k) / 403(b), 457(b), etc.), I have not found a way to hold investments in Canadian dollars. I like that idea (to help reduce currency risk) so if you figure out a way, please let me know!

Traditional IRA \ 401(k) \ 403(b)

Traditional IRAs, 401(k)s and 403(b)s are similar in a number of ways. They are all tax-deferred retirement accounts where you contribute pre-tax dollars and don’t pay interest on gains or dividends until withdrawal, when the withdrawals are treated as income. They also all require participants to reach age 59.5 in order to withdraw funds without penalties. They also differ in some ways, including who they are available to and what the annual limits are. For crossborder purposes, though, they are more similar than different.

All three of these accounts are very similar, also, to RRSP accounts in Canada. As a result, all three can be rolled over to an RRSP. If you’re interested in rolling these over, please see this page or this page for more information. What I’ve decided to do (at least, to this point) is simply to keep these accounts where they are. Because US brokerages sometimes change their policies about Canada-resident US citizens, I like having our accounts distributed among some of the more Canadian-friendly US brokerages. Please visit this page for more info on choosing an appropriate crossborder brokerage.

The short version is, these accounts are fine to hold as a Canadian resident so long as you are at a Canadian-friendly US brokerage, but you almost certainly don’t want to contribute to them as a Canadian resident. The contributions would not be recognized as tax-deferred by the CRA and the US will tax withdrawals as income when the time comes.

Roth IRA \ Roth 401(k) \ Roth 403(b)

Roth IRAs, 401(k)s, and 403(b)s are also similar in a number of ways. They are all tax-deferred retirement accounts where you contribute after-tax dollars and don’t pay any interest on gains or dividends even upon withdrawal. Like their traditional variants, they also all require participants to reach age 59.5 in order to withdraw funds without penalties. And again, like the traditional versions, they also differ in some ways, but those ways aren’t particularly important in terms of their crossborder implications.

These Roth accounts are similar to TFSA accounts in Canada in some ways, but they are also somewhat different and cannot be rolled over into TFSAs as a result. Thus, with a Roth account, the best option is to keep it at a Canadian-friendly US brokerage.

The great news is that the CRA recognizes US Roth accounts, so your withdrawals will be tax-free in both the US and Canada. However, there are a couple of things that you need to do in order to make this work. Note that most of the documentation on the CRA page has to do with Roth IRAs, so it may be easier if you roll Roth 401(k)s and / or Roth 403(b)s into an IRA before moving, if possible. I don’t think that is essential, though, with the caveat that it is outside of my experience as we only had Roth IRAs.

  1. Do NOT contribute to your Roth account after you move to Canada. If you do, it will complicate things in terms of filing requirements and nullify the tax-free withdrawals of that portion of the account.
  2. File an election on your Roth account to the CRA when you file your initial tax return. For more information on that process, please see this page.

If you do both of those things, you should be able to withdraw money from your Roth tax-free in Canada, just as you would have in the US.


457(b)s are deferred compensation accounts. They are like traditional 403(b)s and 401(k)s in that they are employer-sponsored accounts to which you contribute pre-tax dollars. The growth isn’t taxed, and then withdrawals are ultimately taxed as income. The great advantage of 457(b)s for folks interested in early retirement is that there is no are requirement in order to make penalty free withdrawals. In other words, as soon as you stop working for an employer, you can start withdrawing money (as income) regardless of your age.

Because 457(b)s are less common than 401(k) or 403(b)s, I haven’t found much in the way of official documentation on them from the CRA. I asked my crossborder tax accountant, though, and he says even though it’s a bit of a gray area I should be OK. Ultimately, it is in Canada’s interest to recognize them — if they do, they can tax the whole withdrawal as income. If they don’t, they’ll only be able to tax the increase from the date I moved to Canada. Thus, I’m not worried about it, and I’m planning to leave my 457(b) where it is.

So, similar to the traditional IRA / 401(k) / 403(b), 457(b)s are fine to hold but not worth contributing to once you move because the contributions wouldn’t be tax-deferred from the perspective of the CRA.


529s are not recognized by the Canadian government, and they are effectively treated as taxable brokerage accounts for Canadian income tax purposes. The recommended course of action I have seen most often for these is to transfer ownership of them to someone you trust who lives in the US. We never set one up for our daughter (although my dad has one for her) so this isn’t something I have spent a lot of time exploring.

In Conclusion

That sums up what I’ve learned so far about the crossborder implications of several common US investment account types. Are there other account types that you’re curious about? Do you have any experience with the above that you’d like to share? Please let us know in the comments below.

And if you’re interested in learning about the crossborder considerations of Canadian investment account types, look no further.

6 thoughts on “Crossborder Implications of US Accounts”

  1. Came across your profile on FWF. Great job in summarizing different accounts in US/Canada and on the recommendations.

    We made the move back in 2016 (we are not US Citizens/PR) and had to go through these account changes.

    Do you still have an HSA in the US?

    1. Thanks for your comment! I don’t have any experience with HSAs — we had extremely good health insurance in the US as employees of the state of Florida, so we never bothered with on. We had an FSA for daycare, but we used it up before we moved.

  2. Just popping in to say that I’ve been reading your site from start to finish (I hope you’ll keep posting!) and really appreciate the Canadian-US cross-border sharing. It’s a unique perspective and extremely helpful! Also kind of nice to know we’re not the only ones struggling with some of these decisions (we recently returned to BC after 8 years in Maine, and are trying to figure out how to handle taxes & investments this year).

  3. Thanks Leah! I’m glad to hear you’ve found it useful. Honestly, I’m debating whether or not to keep this site going. I feel like, week to week I don’t necessarily have so much to add.
    Content-wise, I feel like I’d have to shift into more of a “FIRE lifestyle” type blog and I’m not particularly interested in that. Comments like yours are good motivation!

  4. I’ll echo Leah. My family is moving to Canada for my partner’s new job this summer. I have many of the same questions about what to do with our savings and investments, and have been trying to figure out what we need to do before the move vs what can wait until after. Your chronicling of your experience is hugely helpful. I hope you’ll keep posting too. Thank you!

    1. Thanks Noah! I really do appreciate it and I’m glad you’re finding this site useful. If you have any questions, please don’t hesitate to post them. It might help me get some ideas of what to write about. 🙂

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