Canadian Expats Moving To The USA Tax Implications – Guide to Canada Exit Taxes and Double Taxation

Expert Guidance for Canadians Moving to the USA

Making a move across borders is more than just a change of scenery. It’s a whole new financial landscape to navigate for all expats. For Canadians setting sights on the USA, understanding the Canadians moving to the USA tax implications is crucial. Our team of proficient accountants and tax advisors are experts in this realm, ensuring you remain financially savvy and compliant.

Examples of moving from the US to Canada

Florida: John, a Canadian expat who recently moved to Miami, was thrilled to learn that Florida has no state income tax. This means that while he still has federal tax obligations, he won’t be subject to additional state taxes on his earned income. However, he should remain vigilant about his Canadian tax implications, especially if he retains financial assets north of the border.

Texas: Michelle, originally from Toronto, transitioned her tech start-up to Dallas. Texas, like Florida, also does not impose a state income tax. However, she realized she needed to know about the franchise tax on her business. With the Canada to the USA tax guide she acquired from our team, she navigated her dual responsibilities efficiently.

California: Raj, a film producer from Vancouver, moved to Los Angeles to expand his career. While the opportunities were vast, so were the tax obligations. California has one of the highest state income tax rates. Coupled with his US tax for Canadian expats obligations, he sought our expertise to ensure he utilized available tax credits and treaties.

New York: Louise, an architect from Montreal, took on a significant project in Manhattan. New York state taxes can be complex, especially with city taxes included. She reached out to our team, ensuring her US tax on Canadian pension was structured correctly, and she was leveraging every available benefit.

US Tax for Canadian Expats Demystified

Venturing into the USA means grappling with a whole new tax system. US tax for Canadian expats can seem daunting, especially considering that the US taxes are based on citizenship rather than residency. Your worldwide income, including Canadian sources, might be on the US tax radar.

But here’s the silver lining – with our meticulously curated Canada to USA tax guide, we shed light on the tax nuances, ensuring you know your financial footing. From the intricate details of the US-Canada tax treaty to leveraging foreign tax credits, we’ve got your back.

Insight: The US and Canada have a tax treaty that can help avoid double taxation. However, utilizing it requires an understanding of its provisions. That’s where we come in!

The Intricacies of Exit Tax for Canadians Moving to the USA

Relocating comes with financial strings attached. One significant aspect for Canadians is the exit tax. Essentially, before your big move, the Canadian government might treat your assets (like stocks or property) as if they’ve been sold, even if they haven’t. This can result in a tax bill.

The good news? Not everyone is hit by this, and there are exemptions. Our adept team will walk you through the process, evaluate if you’re subject to this tax, and suggest ways to potentially minimize its impact.

Deciphering the US on Canadian Pension

Your pension represents years of diligent planning and work. When moving stateside, grasping the US tax on Canadian pensions is pivotal. Various factors, such as the type of pension, your residency status, and more, determine the tax implications. We’ll guide you, ensuring you’re harnessing any tax treaties or deductions and making informed decisions about your retirement funds.

US & Canada Double Taxation Agreement Treaty guide

There are a lot of details that we have covered, but you may wish to refer to our US and Canada double taxation agreement page for more details.


For significant corporate shareholders (owning 10% or more of the company’s voting stock), there’s a 5% withholding tax on cross-border dividends.

For all other cases, it’s 15%.

Example 1: A Canadian individual owning 12% of a US company’s voting stock receives $10,000 in dividends. They’d be subject to a 5% withholding tax, meaning $500 would be withheld by the US, and they’d receive $9,500.


Most cross-border interest income is exempt from withholding taxes due to the treaty.

Example 2: A US business borrows money from a Canadian bank and pays $5,000 in interest annually. Because of the treaty, this interest is typically free from withholding taxes. The Canadian bank receives the full $5,000.


The withholding tax on royalties is generally 10%.

Example 3: A Canadian author earns $20,000 royalties from a US publisher. The US will withhold 10% or $2,000, and the author will receive $18,000.

Capital Gains:

If you’re a resident of one country and sell real property in another, gains are usually taxable in the country where the property is situated.

Pensions and Annuities:

Periodic pension payments and annuities are subject to a withholding tax of up to 15% in the source country.

Real Estate:

Income and gains from real property are taxed in the country where the property is located.

Elimination of Double Taxation:

Both countries aim to avoid double taxation, typically via a tax credit system where taxes paid in one country offset the taxes due in the other.


Nationals of one country cannot be subjected to more burdensome taxes than nationals of the other country in the same situations.

Exchange of Information:

The treaty allows for an exchange of tax-related information between the two countries to enforce domestic tax laws better.

This treaty aims to prevent tax evasion and ensure Canadians and Americans aren’t taxed twice on the same income. Consider seeking professional advice when dealing with cross-border financial activities, as tax laws and treaties can be intricate.

Our Edge in Assisting You:

Deep-Dive Expertise: With vast experience, we’ve tackled various cross-border tax scenarios. You’re in seasoned hands.

Real-Time Knowledge: Tax landscapes shift. We’re always on top of the latest in US and Canadian tax laws, ensuring you’re ahead of the curve.

Bespoke Solutions: No two financial stories are the same. We tailor our approach to your unique narrative, ensuring optimized solutions.

Key Dates, Forms, and Numbers:

April 15th: The standard deadline for 1040 US tax returns. However, additional reporting might be needed if you have a financial interest in Canadian accounts. 

FBAR (FinCEN Form 114): Mandatory if you have Canadian accounts exceeding $10,000 at any time during the tax year.

Form 8938: Necessary for certain Canadian assets, especially if they surpass stipulated thresholds.

Remember, understanding your tax obligations is more than just compliance—it’s about thoughtful financial planning. With our expertise, we seamlessly navigate Canadians moving to USA tax implications, ensuring a smooth financial transition. Let’s embark on this journey together!


Expert tax guidance for Canadians moving to the USA. From understanding the US tax for Canadian expats to navigating pension implications, our advisors have you covered.Canadian Expats Moving To The USA Tax Implications - Guide to Canada Exit Taxes and Double Taxation

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