The TFSA in the US: what does it cost?
The US does not recognise the TFSA. Choose your situation, enter your numbers and see the cost with the arithmetic in words.
- Rules checked
- Next check
- February 2027
- Last change
- None since first publication
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Your result
Your result appears here, with the arithmetic in words. Use the example values to see how it reads.
The rules behind the tool
Each rule has a status. Settled means the statute or the agency says it plainly. Contested means qualified accountants take different positions. Needs a person means it depends on facts this tool cannot see.
| Rule | What it says | Status | Source |
|---|---|---|---|
| Canada: TFSA income and withdrawals | Not taxed in Canada. | Settled | Income Tax Act, s. 146.2; CRA, Tax-Free Savings Account |
| Canada: contributions while a non-resident | Taxed at 1 percent a month on the excess for as long as it stays in the account. TFSA room does not accrue for a year in which you are a non-resident throughout. | Settled | CRA, If you owe tax on non-resident TFSA contributions; Income Tax Act, s. 207.03 |
| US: TFSA income | The US does not recognise the TFSA. Interest, dividends and gains are generally taxed in the year they are earned. | Settled | Canada-US tax treaty (the TFSA is not named in it) |
| US: foreign-trust reporting on a TFSA | Many accountants treat a TFSA held in trust form as a foreign trust, with Forms 3520 and 3520-A. Rev. Proc. 2020-17 exempts certain tax-favoured foreign savings trusts from some reporting, but does not name the TFSA, and accountants differ on whether a TFSA qualifies. The yearly filing fee in this tool is an assumption. | Contested | IRS, About Form 3520; Revenue Procedure 2020-17 |
| US: RRSP growth | Tax on RRSP growth is deferred until withdrawal, and the election is automatic. TFSA money cannot be moved into an RRSP without room. | Settled | Revenue Procedure 2014-55 |
| US withholding on dividends | The US withholds 15 percent on dividends paid to a Canadian resident, under the treaty. It is not recoverable inside a TFSA. Inside an RRSP it is exempt. Canadian-listed funds that hold US stocks bear the withholding inside the fund. | Settled | Canada-US tax treaty, articles X and XXI(2) |
| How your accountant classifies income | Whether dividends are qualified, whether gains are long term, and the 3.8 percent net investment income tax depend on your return. | Needs a person | Your accountant |
What this tool does not cover
- How your accountant classifies dividends and gains, and the 3.8 percent net investment income tax.
- Whether a foreign-trust form applies to your account. That is the accountant's call.
- Currency conversion. Enter every amount in the same currency.
- Any state rule beyond the single rate you enter.
- Your whole portfolio, your room in each account, and what a sale would cost in tax.