US Citizen Moving to Canada: What's the Tax Checklist?

Ten steps, in the order they happen. Before you cross: sell Canadian-listed mutual funds held in taxable accounts, decide what to do with each retirement account, and take any big gains you want taxed only by the US. On the day: document the arrival date and value everything. In the first year: file the Roth IRA election with the CRA, don’t open a TFSA, start the FBAR log, and file a part-year Canadian return plus a full-year US return with the foreign tax credit. After that it’s the same two returns and the same forms every year.

What’s on the checklist, in order?

Three pre-move items where the savings are biggest, three arrival items with deadlines tied to your first Canadian year, and four ongoing items that set the pattern for every year after. The order matters because several steps can’t be reversed once you’re a Canadian resident.

Step	When	What you do	Where it’s covered
1. Sell Canadian-listed funds in taxable accounts	Months before the move	Canadian mutual funds and ETFs are PFICs to the IRS; hold US-listed ETFs instead	PFIC-safe investments
2. Settle each retirement account	Before arrival	Leave the 401(k) and IRA; stop Roth contributions for good; draw down the HSA	401(k) after moving, HSA and Canada
3. Take pre-move gains on purpose	Before arrival	Canada resets your cost base to the arrival-day value, so earlier gains are US-only	Pre-move planning
4. Document the arrival date	Moving day	Lease, one-way tickets, immigration stamp, dated account statements	This page
5. File the Roth IRA election	By your first Canadian return’s due date	One-time election to the CRA under treaty Article XVIII	Roth IRA in Canada
6. Don’t open a TFSA	First year and after	The IRS taxes it yearly and may treat it as a foreign trust	TFSA as a foreign trust
7. Start the FBAR log	Arrival day	Track the peak balance of every Canadian account	FBAR versus Form 8938
8. File both first-year returns	April 30 (Canada); April 15 or June 15 (US)	Canadian return from arrival; US return for the full year	This page
9. Claim the credit on both sides	With each return	Form 1116 on the US return; the RRSP election is automatic	Form 1116 guide
10. Set the annual routine	After the first filing	Two returns, FBAR, Form 8938, T1135 once US assets top $100,000, PFIC watch	Filing deadlines for Americans in Canada

• The checklist is the mirror of leaving Canada permanently. That one is about cutting ties and the departure tax; this one is about arriving without creating US reporting you’ll pay to unwind.
• Steps 1 to 3 are the ones that stop working the day you become resident, because Canada’s deemed acquisition and the PFIC rules both key off that date.

What should I do before I leave the US?

Get the Canadian-listed funds out of your taxable accounts, because once you’re in Canada the IRS taxes them under the PFIC rules, which spread gains and large distributions over your holding period as ordinary income with an interest charge. Leave the 401(k) and traditional IRA where they are. Don’t plan on adding to a Roth IRA after you arrive, since a contribution made while you’re a Canadian resident strips the treaty protection from everything that accrues after it. If a large gain is sitting in a US account, decide now whether to take it while only the US can tax it.

• IRC 1297(a) makes a foreign corporation a PFIC if “75 percent or more of the gross income of such corporation for the taxable year is passive income” or at least 50 percent of its assets produce passive income, which describes almost every Canadian mutual fund and ETF. Under IRC 1291(a), an excess distribution “shall be allocated ratably to each day in the taxpayer’s holding period,” taxed “as ordinary income,” and a disposition is treated “in the same manner as if such gain were an excess distribution.” Which funds count, and the elections that soften it, are in are Canadian mutual funds PFICs.
• Article XVIII(3)(b) of the treaty counts a Roth IRA as a pension, but “from such time that contributions have been made to the Roth IRA … by or for the benefit of a resident of the other Contracting State … to the extent of accretions from such time, such Roth IRA … shall cease to be considered a pension.” Whether to convert a traditional IRA before you go is a separate call: a Roth conversion before moving to Canada.
• Canada treats you as having bought everything at fair market value the moment before you became resident, under ITA 128.1(1)(b) and (c): a deemed disposition “for proceeds equal to its fair market value at the time of disposition” and a deemed reacquisition “at a cost equal to the proceeds of disposition of the property.” Gains from before that moment never reach a Canadian return. The US still taxes them whenever you sell, so the pre-move sale is about simplicity and the credit maths, worked through in moving to Canada from the US.
• The HSA has no counterpart in the treaty, so our practice is to stop contributions before the move and spend it down on eligible expenses; the reasoning is in what happens to an HSA in Canada.

What do I file in the first year?

A Canadian return that starts on your arrival date, a US return for the whole calendar year, and the Roth election. Your Canadian residence starts the day you enter with a home and family ties, so nail that date down with paper. The Canadian return reports worldwide income from that date; the US return reports the full year and takes a credit on Form 1116 for the Canadian tax. The Roth election goes to the CRA by the due date of that first Canadian return. The RRSP election on the US side is automatic for most people, so there’s nothing to file for it.

• The CRA’s Folio S5-F1-C1, ¶1.28: someone who “enters Canada and establishes residential ties with Canada … will generally be considered to have become a resident of Canada for tax purposes on the date the individual entered Canada.” Keep the signed lease, one-way tickets, the immigration document and account statements dated that day. If the facts are mixed (family arriving later, a US home kept), Form NR74 asks the CRA to rule.
• ITA 114 limits the first return to the resident part of the year for “an individual who is resident in Canada throughout part of the year and non-resident throughout another part of the year.” It’s due “the following April 30” under ITA 150(1)(d).
• The US return is due April 15, but the IRS page for citizens abroad allows “an automatic 2-month extension to file your return without requesting an extension,” to June 15, with October 15 available “by filing Form 4868.” Interest runs from April 15 either way. The credit comes from Article XXIV(1), under which the US “shall allow to a citizen or resident of the United States … as a credit against the United States tax on income the appropriate amount of income tax paid or accrued to Canada,” and unused credit carries under IRC 904(c) to “the first preceding taxable year and in any of the first 10 succeeding taxable years.”
• The foreign earned income exclusion, “$130,000” for 2025 and “$132,900” for 2026 per the IRS 2025 and 2026 adjustments, needs either “a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year” or “at least 330 full days” abroad in twelve months under IRC 911(d)(1). A mid-year mover rarely qualifies in year one, and in Canada the credit is usually the better tool anyway; see FEIE versus the foreign tax credit.
• Roth election. The CRA’s Folio S5-F3-C1: “the income accrued in a Roth IRA is generally taxable in Canada on a current, annual basis” without it (¶1.3); “Any individual resident in Canada who wishes to defer taxation in Canada of income accrued in a Roth IRA should file a one-time irrevocable Election for each Roth IRA that they own” (¶1.15), “on or before the individual’s filing-due date for the tax year in which the individual became resident in Canada” (¶1.16).
• RRSP election. Revenue Procedure 2014-55: an eligible individual “will be treated as having made the election in the first year in which the individual would have been entitled to elect the benefits under Article XVIII(7) with respect to the plan,” and “is not required to report his interest in the RRSP on Form 8891, Form 3520, or Form 3520-A.” The old form is gone; do I still file Form 8891 explains what replaced it.

Which Canadian accounts should I open or avoid?

Open an RRSP once you have Canadian earned income, because the treaty and the IRS’s own procedure shelter its growth from US tax until you withdraw. Don’t open a TFSA: Canada doesn’t tax it, but the US does, every year, on the interest, dividends and gains inside it, and whether it’s also a foreign trust that needs Forms 3520 and 3520-A is unsettled. Ordinary bank and brokerage accounts are fine, but each one goes on your FBAR, and anything Canadian-listed inside the brokerage account is a PFIC.

Account	Canada	US income tax	US information return
RRSP	Deductible contributions; growth deferred	Deferred under treaty XVIII(7); election automatic (Rev. Proc. 2014-55)	FBAR; Form 8938; no Form 3520 or 3520-A
TFSA	Tax-free	Taxed every year; not a pension, so no XVIII(7) deferral	FBAR; Form 8938; Forms 3520 and 3520-A contested
Canadian mutual fund or ETF (non-registered)	Taxed normally	PFIC rules under IRC 1291 unless an election is made	Form 8621, plus FBAR and 8938 for the account
Canadian bank or brokerage account	Taxed normally	Taxed normally, with the credit	FBAR; Form 8938

• RRSP room. Under ITA 146(1), new room each year is “the lesser of the RRSP dollar limit for the year and 18% of the taxpayer’s earned income for the preceding taxation year,” and “earned income” counts only income “for a period in the year throughout which the taxpayer was resident in Canada.” So you have no room in the arrival year and build it from your first year of Canadian earnings. The CRA’s limits table puts the RRSP dollar limit at “$32,490” for 2025 and “$33,810” for 2026. The US side of contributing is in RRSP contributions as a US citizen in Canada.
• TFSA room. ITA 207.01(1) adds the year’s dollar limit only “if at any time in the calendar year the individual is 18 years of age or older and resident in Canada,” so room starts in the arrival year; the limit is “$7,000” for 2025 and 2026 on the CRA table. None of that helps a US citizen: Article XVIII(7) defers US tax only for a plan “operated exclusively to provide pension or employee benefits,” which a TFSA isn’t. On the trust question, Revenue Procedure 2020-17 lifts Form 3520 reporting for a foreign savings plan run “to provide, or to earn income for the provision of, medical, disability, or educational benefits” with contributions “limited to $10,000 or less annually or $200,000 or less on a lifetime basis,” and a general-purpose TFSA doesn’t fit that description, which is why the question stays open. What the reporting actually costs is in what TFSA reporting costs on a US return. If your spouse isn’t a US person, a TFSA in their name alone is fine.
• The RRSP and the TFSA compared with their US cousins: RRSP versus 401(k) and TFSA versus Roth IRA.

Which information returns start when I arrive?

The FBAR, once your Canadian accounts together top $10,000 at any point in the year, which for most arrivals is the first month. Form 8938 at the higher thresholds for someone living abroad. And on the Canadian side, Form T1135 once your US accounts and other foreign property cost more than $100,000. None of them carries tax; the penalties for missing them are the problem, so the log starts on arrival day.

• FBAR: required once “the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported,” “due April 15 following the calendar year reported,” with “an automatic extension to October 15.” Every Canadian bank, brokerage, RRSP and TFSA counts, and so does a joint account you can sign on. See who has to file an FBAR.
• Form 8938: for “a taxpayer living abroad” filing alone, once specified foreign assets are “more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year”; on a joint return, “more than $400,000 … or more than $600,000.” It’s filed with the 1040. Thresholds and what counts are in the Form 8938 thresholds.
• Form T1135 is Canada’s version. ITA 233.3(1) requires it where “the total of all amounts each of which is the cost amount to the entity of a specified foreign property of the entity exceeds $100,000.” US brokerage accounts, IRAs and bank balances all count toward the $100,000 of cost.
• Form 8621 for each PFIC, if you kept any, and Form 3520 for any inheritance or gift over $100,000 from a non-US person; the RRSP itself doesn’t need a 3520.

How do the two first-year returns fit together?

The Canadian return only sees income from the arrival date; the US return sees the whole year but credits the Canadian tax on the overlap. So the US tax on the pre-move months is paid as usual, and the Canadian tax on the post-move months is either fully absorbed by the credit or, more often, exceeds the US tax on that slice, leaving a carryforward.

What should I do next?

Work the list from the top. If you haven’t moved yet, do steps 1 to 3 this month, because they close on the day you arrive. If you’ve just landed, get the arrival-date paperwork and account values into one folder and put the Roth election on the calendar for your first Canadian filing deadline. If you’ve been here a year already and skipped any of this, the fixes exist, but they cost more than the steps did.

• Moving to Canada from the US: the tax side, the consequences behind each step, including the exit tax for green card holders
• Your first US year as an American in Canada, the RRSP election and the first dual filing
• IRA and Roth IRA contributions from Canada, what you can still put in
• RESPs for a US citizen parent, the education account question
• What to look for in a cross-border accountant, if you’re hiring one

Related guides:

• US Citizen Moving to Canada: Tax Planning for Americans Becoming Canadian Residents

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.