Canadian Retirees in Florida: Who Taxes What
Each retirement income type, which country taxes it, the withholding, and the credits
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A Canadian retiree who moves to Florida and becomes a U.S. resident is taxed by the United States on worldwide income, with credits for Canadian tax. Canada keeps withholding on Canadian-source pensions, RRIF payments, and rent. Under the treaty, CPP and Old Age Security are taxed only in the U.S., and Florida adds no state income tax.
On this page
Who taxes what (2026)
| Income | Canada | United States |
|---|---|---|
| CPP, QPP, OAS | No tax (treaty Article XVIII(5)) — and U.S. residents are exempt from the OAS recovery tax | Taxed as if U.S. Social Security (up to 85 percent) |
| RRIF periodic payments | 15 percent withholding (treaty) | Taxed, with a credit for the 15 percent |
| RRSP or RRIF lump sums | 25 percent withholding | Taxed, with a credit |
| Employer pension | 15 percent withholding on periodic payments | Taxed, with a credit |
| Canadian dividends | 15 percent withholding | Qualified dividends, with a credit (the qualified dividends guide) |
| Canadian rental income | 25 percent of gross, or section 216 on net (the NR6 guide) | Taxed, with a credit |
| U.S. Social Security | — | Taxed (up to 85 percent) |
| Net investment income tax (3.8 percent) | — | Applies to net investment income once modified AGI exceeds US$200,000 (US$250,000 joint) — Canadian tax can't be credited against it (Estate of Bruyea, 2026) |
| Florida income tax | — | None |
Filings each year
U.S.: Form 1040 with Form 1116, FBAR and Form 8938 for Canadian accounts. Canada: no OAS Return of Income (U.S. residents are exempt from the recovery tax); NR301s with each payer, and section 216 or 217 returns where they help (the section 217 guide).
Frequently asked questions
Do Canadian retirees in Florida pay Canadian tax?
Through withholding on Canadian pensions, RRIFs, dividends, and rent — but not on CPP or OAS.
Is my CPP taxable in the U.S.?
Yes — taxed like U.S. Social Security, and not in Canada.
What does Florida tax?
No income tax on any of it.
Do I still file anything in Canada?
NR301s with Canadian payers, and section 216 or 217 returns where useful — but not the OAS Return of Income, which U.S. residents don't file.
Official sources
The IRS explains: “Under Article XVIII, pensions and annuities from Canadian sources paid to U.S. residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity).” — Internal Revenue Service, Publication 597, Information on the United States–Canada Income Tax Treaty, https://www.irs.gov/publications/p597
The Canada Revenue Agency explains: “As the Canadian payer or withholding agent, you are responsible for withholding and remitting Part XIII tax, and for reporting the income and withholding tax on an NR4 information return.” — Canada Revenue Agency, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting, https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4061/nr4-non-resident-tax-withholding-remitting-reporting.html
The Federal Circuit held: “In sum, we agree with the government: the Code does not allow Bruyea to apply a foreign tax credit for the taxes he paid to Canada (on the income he realized for his sale of property in Canada) as an offset to the net investment income tax he owes the U.S. under Code § 1411.” — U.S. Court of Appeals for the Federal Circuit, Estate of Bruyea v. United States, No. 2025-1563 (Aug. 31, 2026), https://www.cafc.uscourts.gov/opinions-orders/25-1563.OPINION.8-31-2026_2747795.pdf
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 annual returns for Canadian retirees in Florida — U.S. returns with credits, Canadian non-resident filings, and withholding reviews. 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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