Moving From Canada to the U.S.: Your First U.S. Tax Year
The starting date, the move-year return, the basis election, and what to close or report
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A Canadian who moves to the United States becomes a U.S. tax resident on a starting date set by the green card or the substantial presence test. The move year is usually a dual-status return, the treaty basis election protects departure-taxed gains, and some Canadian accounts are best closed before leaving.
On this page
The first-year checklist
| Item | What to do |
|---|---|
| Residency starting date | First day present as a green card holder, or first day of presence in the year the substantial presence test is met (up to 10 days with a closer connection to Canada can be disregarded) (the substantial presence guide) |
| Move-year return | Dual-status, or a full-year joint return with the nonresident spouse election (the dual-status and nonresident spouse guides) |
| Basis election | Article XIII(7) on the first U.S. return for departure-taxed property (the departure tax guide), disclosed on Form 8833 |
| TFSA | Close before the move — not recognized by the U.S. (the TFSA vs Roth guide) |
| Canadian mutual funds and ETFs | PFICs — sell before the move or plan elections (the PFIC guide) |
| RRSP and RRIF | Keep — deferred automatically under the treaty; stop contributing |
| Canadian corporation | Plan before leaving — the CFC rules apply from the starting date (the kept-Canadian-corporation guide) |
| FBAR and Form 8938 | Report Canadian accounts from the first resident year |
State taxes
Florida has no personal income tax, and neither do Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, or Wyoming (Washington taxes only certain capital gains); the other states tax residents under their own residency rules, usually with a part-year resident return for the move year.
The Canadian side
The final Canadian return with the departure date, the departure tax computations, and Form NR73 if residency is uncertain (the NR73 guide); the Canada child benefit and the Canada Groceries and Essentials Benefit (the GST/HST credit, renamed in July 2026) end (the Canada child benefit guide).
Frequently asked questions
When do I become a U.S. tax resident?
On the first day you're in the United States as a green card holder, or the first day of presence in the year you meet the substantial presence test.
Will the U.S. tax gains on my Canadian investments from before I moved?
Not if you make the treaty's basis election for property Canada taxed on departure.
Should I close my TFSA before moving?
Generally yes — the United States doesn't recognize it.
Can I keep my RRSP?
Yes — its growth stays tax-deferred in the United States under the treaty.
Official sources
The IRS explains: “If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year.” — Internal Revenue Service, Publication 519 (2025), U.S. Tax Guide for Aliens, https://www.irs.gov/publications/p519
The CRA explains: “If you ceased to be a resident of Canada in the year, you were deemed to have disposed of certain types of property at their fair market value (FMV) when you left Canada and to have immediately reacquired them for the same amount. This is called a deemed disposition.” — Canada Revenue Agency, Dispositions of property for emigrants of Canada, https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/dispositions-property.html
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle Canada-to-U.S. move planning — residency starting dates, move-year returns, basis elections, pre-move account restructuring, and the Canadian departure return. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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