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I moved to Canada with a Roth IRA — does Canada tax the growth inside it every year?

Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, or legal advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional. You use this information at your own risk.
The short answer

By default, yes. CRA's position (folio S5-F3-C1) is that a Roth IRA is not automatically a treaty pension — Canada will tax the accruals annually unless you make a one-time treaty election on your first Canadian return and you stop contributing to the Roth once you become a Canadian resident. Get both conditions right and the Roth keeps its US-style tax-free treatment in Canada.

The two conditions

#ConditionDetail
1One-time electionClaim the treaty pension treatment on your first Canadian tax return after the move — it cannot be made retroactively as a matter of right
2No further contributionsAny contribution made while a Canadian resident can destroy the pension treatment for the entire account

With the election in place and no new contributions, growth inside the Roth is not taxed in Canada, and qualifying US distributions stay tax-free in Canada too.

What breaks it

  • Contributing even once as a Canadian resident — the single most common way people lose the treatment.
  • Rolling a 401(k) into the Roth after the move (that's a contribution).
  • Missing the election on the first return (see the companion article on fixing a missed election).

Frequently asked questions

I made the election years ago and never contributed since. Am I safe?

Yes — the election is one-time and ongoing. Just don't touch the contribution side.

What about a Roth 401(k)?

Same analysis: the treaty looks at whether the arrangement qualifies as a pension. Get advice before moving one across the border.

Does the US care that I made a Canadian election?

No. The election is for Canadian tax purposes; your US treatment of the Roth is unchanged.

Sources

  • https://bbs.fcgvisa.com/t/401k-ira/53529
  • https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-3-cross-border-issues/income-tax-folio-s5-f3-c1-taxation-roth-ira.html (CRA Folio S5-F3-C1)
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Disclaimer — please read. This article is for general information and educational purposes only. It is not tax, accounting, legal, financial, or immigration advice, and reading it does not create a professional or client relationship between you and Llandora. Tax and immigration rules change frequently and differ by country, province/state, and personal circumstances; figures, thresholds, and examples in this article may be outdated, incomplete, or incorrect, and may not apply to your situation. Always verify current rules with the official sources (CRA, IRS, IRCC, USCIS) and consult a licensed professional before making any decision. Llandora makes no warranty of any kind — express or implied — about the accuracy, completeness, reliability, or timeliness of this content. To the fullest extent permitted by law, Llandora disclaims all liability for any loss, damage, cost, or expense arising from errors or omissions in this article or from any action taken or not taken in reliance on it, whether direct, indirect, incidental, or consequential. You rely on this article entirely at your own risk.