Spousal RRSP After Moving to the U.S.
The attribution rule, the non-resident exception, withdrawal taxation, and income equalization
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A spousal RRSP is funded by one spouse for the other, shifting retirement income to the lower earner. Withdrawals within three years of a contribution are normally taxed to the contributor, but that rule doesn't apply when either spouse is a non-resident. After a move to the U.S., withdrawals face Canadian withholding and U.S. tax with a credit.
On this page
The rules
| Item | Treatment |
|---|---|
| Attribution | Withdrawals taxed to the contributor, up to the amount contributed, if they contributed to any spousal plan in the year or the two before (ITA s.146(8.3)) |
| Non-resident exception | Attribution doesn't apply if either spouse is a non-resident of Canada at the time of withdrawal (ITA s.146(8.7)(b)) |
| Canadian withholding | 25 percent on RRSP withdrawals and lump sums; 15 percent under the treaty on periodic RRIF payments (up to the greater of twice the minimum or 10 percent of the fund's value) |
| U.S. tax | Taxed to the annuitant (the plan holder) as a U.S. resident, with a credit for Canadian withholding; growth deferred under the treaty |
After the move
Once both spouses are U.S. residents filing jointly, the spousal RRSP's income-splitting purpose largely disappears — the joint return combines income anyway. It still matters for spouses who file separately, federally or for state tax. Stop contributing after the move (the RRSP over-contribution guide).
Frequently asked questions
Does the spousal RRSP three-year rule apply after I move?
No — attribution doesn't apply when either spouse is a non-resident of Canada at the time of the withdrawal (ITA s.146(8.7)(b)).
How are spousal RRSP withdrawals taxed after a move?
Canadian withholding (25 percent lump sum) and U.S. tax for the annuitant, with a credit.
Is a spousal RRSP still useful in the U.S.?
Less so — a U.S. joint return already combines income.
Can I keep contributing?
You generally don't earn new room as a non-resident unless you have certain Canadian-source earned income, and there's no U.S. deduction — usually stop.
Official sources
The Canada Revenue Agency lists, among the exceptions to spousal RRSP attribution: “at the time of payment, or when the CRA considers the payment to have been received, you or your spouse or common-law partner were non-residents of Canada” — Canada Revenue Agency, RRSPs and Other Registered Plans for Retirement, https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4040/rrsps-other-registered-plans-retirement.html
The Canada Revenue Agency explains: “An RRSP is a retirement savings plan that you establish, that the CRA registers, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax.” — Canada Revenue Agency, Registered Retirement Savings Plan (RRSP), https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/registered-retirement-savings-plan-rrsp.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 RRSP and spousal RRSP withdrawal planning across a move, and both countries' returns. 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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