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

Eight steps, in order: clean up your US investment accounts before you leave, document your arrival date, establish Canadian residency properly, make the treaty elections on your first Canadian return, avoid the Canadian accounts that create US compliance nightmares, start FBAR and Form 8938 tracking from day one, file your first dual-country returns, and set up the ongoing annual structure. This is the opposite-direction mirror of the leaving Canada permanently checklist. Where that checklist is about severing ties and managing departure tax, this one is about arriving cleanly and avoiding the traps that cost Americans in Canada thousands in unnecessary compliance fees every year.

What is on the US citizen moving to Canada tax checklist?

Ten items, in the order they should happen. The pre-move items (steps 1 through 3) are where the planning leverage is highest, because several decisions become either impossible or expensive to reverse after you establish Canadian residency. The arrival items (steps 4 through 6) are time-sensitive, with deadlines tied to your first Canadian tax year. The ongoing items (steps 7 through 10) set the annual structure you will follow for as long as you live in Canada.

Step	When	What you do	Where it’s covered
1. Restructure US investments to avoid PFICs	Months before the move	Sell Canadian-listed mutual funds in taxable accounts; consolidate into US-listed ETFs	PFIC-safe investments
2. Plan your retirement account strategy	Before arrival	Roth IRA election prep, HSA drawdown, 401(k) rollover decision	Roth IRA in Canada, 401(k) after moving
3. Document your arrival date	Moving day	Keep one-way tickets, lease signing, PR card activation, utility hookups	This page
4. File the RRSP treaty election	With your first Canadian return	One-time statement under Article XVIII(7)	RRSP for Americans
5. File the Roth IRA treaty election	With your first Canadian return	One-time election to preserve tax-free status in Canada	Roth IRA in Canada
6. Do NOT open a TFSA	First year and ongoing	The TFSA is likely a foreign trust for US purposes	TFSA as a foreign trust
7. Start FBAR tracking	From arrival day	Track peak balances in every Canadian financial account	FBAR vs Form 8938
8. File your first dual-country returns	April 30 (Canada) and April 15 (US) of the following year	Canadian return from arrival date; US return full year	This page
9. Claim foreign tax credits on both sides	With each return	Form 1116 on the US side; line 40500 on the Canadian side	Form 1116 guide
10. Set up the ongoing annual structure	After the first filing	Annual dual filing, FBAR, Form 8938, and the PFIC watch	This page

What should I handle before I leave the US?

The pre-move window is when you have the most flexibility and the lowest cost. Three things belong here. First, restructure your investment accounts. If you hold Canadian-domiciled mutual funds or ETFs in a taxable US brokerage account, sell them before you move. After you become a Canadian resident, these funds are almost certainly PFICs for US purposes, and the PFIC regime imposes punitive taxation on gains unless you make annual elections. US-listed ETFs that track the same indices are not PFICs. Make the switch while you are still a US-only filer and the gain is a simple US capital gain.

Second, review your retirement accounts. A 401(k) should generally stay in the US and continue growing. A Roth IRA should also stay, but you need to prepare for the Canadian treaty election (step 5 below). An HSA stops being useful after you become a Canadian resident (contributions are no longer deductible on either side, and the account creates a Canadian taxable benefit), so draw it down for eligible medical expenses before the move date.

Third, if you hold appreciated assets and the gain is large, consider whether realizing it as a US-only taxpayer is simpler than realizing it later when both countries have a claim. Canada will set your cost base to fair market value on your arrival date for most property, so pre-move gains are a US-only event.

How do I establish and document my Canadian residency date?

Your Canadian tax residency starts on the day you establish significant residential ties in Canada, which in practice means the day you arrive with the intention of settling. The CRA looks at the factors listed in Folio S5-F1-C1: a dwelling available to you, a spouse or dependants in Canada, and secondary ties like a Canadian bank account, driver’s licence, or provincial health card. Establishing any significant tie, combined with physical presence, is usually enough.

Document the date thoroughly because it determines when your Canadian tax year starts. Keep your one-way plane ticket or border crossing record, the signed lease or purchase agreement, the date you activated provincial health coverage, the date you enrolled children in school, and any immigration document with a stamped entry date (PR card, work permit activation). The Canadian return for your move year covers only the period from this date through December 31, so getting it wrong by even a few weeks can shift income between the two countries.

If your situation is ambiguous (you kept a US home, you traveled back frequently, or your family arrived at different times), you can file Form NR74 with the CRA to request a residency determination. The treaty tiebreaker in Article IV resolves dual-residency cases by looking at permanent home, centre of vital interests, habitual abode, and nationality, in that order.

What US tax elections do I need to make in my first Canadian year?

Two elections, both filed with your first Canadian return that covers the period after arrival. The first is the RRSP treaty election under Article XVIII(7) of the Canada-US tax treaty. If you open or contribute to an RRSP after arriving, the IRS does not recognize the RRSP as a tax-deferred account by default. Without the election, the IRS would tax the annual growth inside the RRSP on a current basis, even though no distribution occurred. The election is a statement attached to your US return, and once made, it carries forward without needing renewal. The RRSP guide explains how the account works on the Canadian side.

The second is the Roth IRA election. Canada does not recognize the Roth IRA as tax-exempt by default. Without the election, Canada would tax the annual growth as ordinary income. The election, also under Article XVIII(7), preserves the tax-free status on the Canadian side. File it with your first Canadian return and it carries forward. The Roth IRA cross-border guide covers the mechanics and the interaction with the US side.

Both elections are straightforward (a statement attached to the return), but missing either one in the first year can create years of corrective filings. If you are working with a cross-border accountant, these should be standard items on their first-year checklist.

What Canadian accounts should I open or avoid as an American?

Open an RRSP if you have Canadian earned income (employment or self-employment). The RRSP is the Canadian equivalent of a 401(k): contributions are deductible on your Canadian return, growth is tax-deferred, and withdrawals are taxed as income. With the treaty election in place, the US respects the deferral and does not tax the annual growth. The contribution limit is 18% of your prior-year Canadian earned income, up to the annual ceiling ($32,490 for 2025).

Do not open a TFSA. The Tax-Free Savings Account is the single most problematic Canadian account for Americans. The CRA treats it as a tax-free account (contributions not deductible, growth and withdrawals tax-free). The IRS likely treats it as a foreign trust, which triggers Forms 3520 and 3520-A annually, current taxation on all growth, and penalties for late or missed filings that can exceed the account balance. The compliance cost alone, typically $500 to $1,500 per year in professional fees, usually exceeds any tax benefit the TFSA provides. If your Canadian spouse (who is not a US person) opens a TFSA, that is fine, but keep your name off it.

Be cautious with RESPs (Registered Education Savings Plans). The US treatment of an RESP is unsettled, and some practitioners treat it as a foreign trust. If you need education savings, a US 529 plan is simpler from a compliance standpoint, though 529 plans receive no Canadian tax benefit.

Canadian bank accounts and brokerage accounts are fine to open, but remember that every one of them is a foreign financial account for FBAR purposes. Track the peak balance in each account throughout the year.

What information returns start when I arrive in Canada?

Two US information returns trigger from day one. The FBAR (FinCEN Form 114) is owed if your aggregate foreign financial account balances exceed $10,000 at any point during the calendar year. “Foreign” means non-US, so every Canadian bank account, brokerage, RRSP, RESP, and even a joint account where you have signature authority counts. For most Americans moving to Canada, the FBAR is owed from the first year. The filing deadline is April 15 with an automatic extension to October 15.

Form 8938 (FATCA) is owed if your specified foreign financial assets exceed the filing thresholds. For Americans living abroad, the thresholds are $200,000 at year-end or $300,000 at any time during the year (single), and $400,000 at year-end or $600,000 at any time (married filing jointly). These thresholds are higher than the domestic ones, but if you own a Canadian home plus retirement accounts, you can reach them quickly.

On the Canadian side, if you hold US financial accounts or other foreign property with a total cost exceeding $100,000 CAD at any point during the year, you owe Form T1135 with your Canadian return. US brokerage accounts, IRAs, 401(k)s, and bank accounts all count. The T1135 is Canada’s equivalent of the FBAR, and the late-filing penalties are steep.

Neither of these forms creates a tax liability. They are information returns. But the penalties for not filing them, or filing them late, are disproportionately large relative to the effort of filing them on time. Set up a tracking spreadsheet on arrival day and update it monthly.

What should I do next?

This checklist covers the framework, but the specific numbers (which credits to claim, how much to contribute to the RRSP, whether to convert a traditional IRA to a Roth before the move) depend on your income, your assets, and your timeline. If you are planning a move to Canada or have recently arrived and want to make sure the first-year filings are set up correctly, a cross-border tax assessment walks through your specific situation and identifies which elections and filings apply.

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