If you are a U.S. person holding Canadian retirement accounts like an RRSP or TFSA, you may naturally be wondering whether these accounts generate any U.S. reporting requirements. The short answer is: yes, they can—and usually do.
FinCEN Form 114, also known as the FBAR (Foreign Bank Account Report), should be documented if the combined value of all the foreign financial accounts—covering RRSPs and TFSAs—exceeds $10,000 at any point during the calendar year. Such a rule applies even if the income inside these accounts is not taxable in parallel to the dual tax treaty US Canada.
Important considerations within this context are presented below:
Even though they are retirement or savings vehicles in Canada, they simply fall under FBAR rules if thresholds apply.
FinCEN 114 asks for the peak balance, not the year-end balance.
The RRSP might satisfy eligibility for the Form 3520-A exemption RRSP status under IRS guidance, but that does not influence the FBAR obligation.
Due to their foreign trust classification, TFSA IRS reporting may also involve Form 3520 and 3520-A.
Failing to report foreign accounts can result in steep fines—even if the oversight was unintentional.
It is true that the dual tax treaty US Canada presents meaningful, useful tax relief. However, it does not replace FBAR requirements. Proper filing practices make sure that the cross-border retirement accounts stay fully compliant.
Watter CPA presents professional assistance to individuals in recognizing and satisfying their FBAR for RRSP and TFSA requirements while fully satisfying the U.S. and Canadian tax laws. No matter if it is clarifying RRSP filing requirements US Canada or managing TFSA IRS reporting, our experienced team is ready to present expert aid. Contact us today and schedule your initial consultation for financial clarity.
