My RRSP is tax-deferred in the US now — so I don't report it anywhere, right?
⚠️ 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 Figures may be outdated or incorrect; tax rules change frequently.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
Wrong. The treaty deferral covers income tax on the earnings — it does not exempt the account from reporting. Your RRSP still goes on the FBAR every year, and on Form 8938 if you exceed the thresholds. Deferral and disclosure are two separate obligations, and the penalties for missing the disclosure are severe.
What deferral does and doesn't do
| Deferral (Rev. Proc. 2014-55) | Still required |
|---|---|
| US income tax on inside buildup: deferred until distribution | FBAR (FinCEN 114): yes, every year if aggregate foreign accounts > $10,000 |
| Form 8938: yes, if over thresholds | |
| Distributions: taxable as ordinary income when received |
The thresholds
| Form | Threshold (single filer) |
|---|---|
| FBAR | Aggregate of all foreign accounts > $10,000 at any time in the year |
| Form 8938 — living in the US | > $50,000 on the last day, or > $75,000 at any time |
| Form 8938 — living abroad | > $200,000 on the last day, or > $300,000 at any time |
The FBAR is filed with FinCEN (not the IRS), due April 15 with an automatic extension to October 15. Form 8938 attaches to your 1040.
Frequently asked questions
What's the penalty for missing FBAR?
Non-willful violations run up to $10,000 per violation; willful violations are far worse. File it — it's free.
Does the treaty deferral mean Canada won't tax the RRSP either?
No — Canada taxes RRSP withdrawals as income when taken. The treaty coordinates which country taxes when, via foreign tax credits.
Sources
- https://www.atamatax.com/treaty/canada
- https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements (IRS)
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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differ by country, province/state, and personal circumstances; figures, thresholds, and examples in this article may be outdated, incomplete, or incorrect, and may not apply to your situation.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.