Technical article
Your US Retirement Accounts When You Move to Canada
They are thinking about moving to Canada, and they ask what happens to the accounts.
Picture a couple named Paul and Carol. Both are 61. They hold a traditional IRA, a Roth IRA and an old 401(k). They are thinking about moving to Canada, and they ask what happens to the accounts.
Two tax systems look at those accounts. I read what the IRS and the Canada Revenue Agency publish. Neither answers everything, and I say where.
When Canada starts counting
The Canada Revenue Agency says that for most newcomers, residence for tax "starts the first day you live in Canada." It also says you become a resident when you have enough residential ties. The page (modified 2026-08-03) does not mention foreign pensions.
What the IRS says about IRAs
IRS Publication 597 covers the Canada treaty. It is marked "Revised: October 2015", and the IRS page was updated 30 April 2026. From it:
- IRAs count as pensions: "Pensions also include payments from individual retirement arrangements (IRAs) in the United States."
- Roth IRA: "A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U.S. tax."
- Deferral on Roth growth: the publication says income that builds up inside a Roth IRA but is not paid out can be deferred for Canadian tax. It adds: "you cannot defer tax on any accruals due to contributions made after you become a Canadian resident."
- Filing: "you still have to file a Form 1040 and report your worldwide income."
The summary I received says the publication does not discuss 401(k) plans. So I have nothing official on those here.
What Canada's own page says
The CRA page for line 31400 (dated 2026-01-20) says income from a US IRA does not qualify for the pension income amount. It also says foreign pension income that is tax-free in Canada because of a treaty does not qualify. For 2025 the federal amount is the lesser of CAD 2,000 or a worksheet amount.
The treaty text
Article XVIII of the treaty, as returned, includes a limit on source-country tax: "the tax so charged shall not exceed 15 per cent of the gross amount of such payment" for periodic pension payments. The definition of pensions includes "any payment under a superannuation, pension or retirement plan."
A summary table
| Account | What I could confirm | Source |
|---|---|---|
| Traditional IRA | Counts as a pension under the treaty guide | IRS Pub. 597 |
| Roth IRA | Payouts exempt in Canada to the extent exempt in the US; growth may be deferred, but not growth from contributions made after you become a Canadian resident | IRS Pub. 597 |
| 401(k) | Not stated on an official page | None |
What is left open
- How the CRA treats a 401(k).
- The Canadian filing steps for the Roth election. The CRA page on this did not load, and I stopped after one more try.
- Anything after the 2015 revision of the IRS publication that changes these points.
You could…
- List each account, its type and the date you opened it.
- Mark which contributions were made before the move and which after.
- Ask an accountant or lawyer who works with Americans abroad to confirm the treatment before you change anything.
Which account on your list would you want checked first?
Figures are estimates for planning, based on public data. Date read: 10 October 2026.
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