Methodology & Sources

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How the IRS treats each account

• RRSP growth isn't taxed annually to a US person — the IRS recognizes RRSP/RRIF tax deferral automatically, without a separate election. (Same rule cited in full under RRSP Withholding Tax below.)

  • IRS guidanceRevenue Procedure 2014-55 — Internal Revenue Service

• PFIC (Passive Foreign Investment Company): a foreign corporation is a PFIC if 75% or more of its gross income is passive, or 50%+ of its assets produce passive income — a classification that can catch Canadian-domiciled mutual funds and ETFs and trigger punitive US tax treatment, reported on Form 8621.

  • Primary law26 U.S.C. § 1297 — Cornell Legal Information Institute (U.S. Code)
  • IRS guidanceAbout Form 8621 — Internal Revenue Service

Reporting thresholds

• FBAR: a US person with foreign financial accounts totaling more than $10,000 at any point in the year must file FinCEN Form 114.

  • Primary law31 CFR § 1010.350 — Cornell Legal Information Institute, implementing 31 U.S.C. § 5314
  • Government guidanceReport Foreign Bank and Financial Accounts — FinCEN

• FATCA: US persons with specified foreign financial assets above a threshold that varies by filing status and residency — $50,000 (single) / $100,000 (married filing jointly) on the last day of the year, or $75,000 / $150,000 at any point in the year, if living in the US; $200,000 / $400,000 (last day) or $300,000 / $600,000 (any point in the year) if living abroad — must report them on Form 8938, on top of any FBAR filing. The Action Items page's FBAR/FATCA tracker checks a single current-balance figure against the lower "last day of the year" tier, since either test triggers filing and the tracker can't distinguish the two from one snapshot balance.

  • Primary law26 U.S.C. § 6038D — Cornell Legal Information Institute (U.S. Code)
  • IRS guidanceAbout Form 8938 — Internal Revenue Service

• 2026 HSA contribution limits: $4,400 self-only coverage, $8,750 family coverage, plus a $1,000 catch-up contribution at age 55+.

  • IRS guidanceRevenue Procedure 2025-19 — Internal Revenue Service

OAS recovery tax & RESP grants

• OAS is income-tested: once net world income passes an annually-indexed threshold (roughly $95,300 for 2026), OAS is clawed back at 15 cents per dollar above it, fully eliminated at a higher indexed threshold.

  • Government guidanceOld Age Security pension recovery tax — Government of Canada

• The Canada Education Savings Grant (CESG) matches 20% of RESP contributions, up to $500 per year per beneficiary ($7,200 lifetime maximum).

  • Government guidanceCanada Education Savings Grant (CESG) — Canada Revenue Agency

What this calculator doesn't model

Every total here is a pre-tax planning target — no cross-border tax drag (TFSA/RESP taxability, PFIC treatment, withholding on benefits) is subtracted from the numbers shown. Accounts are pooled as one household total in spouse mode, not tracked per person against individual contribution limits. See the full guide for the plain-English walkthrough.

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The mechanism

• Deemed disposition: on ceasing Canadian residency, most property is treated as sold at fair market value the day before departure and immediately reacquired at that value.

  • Primary lawIncome Tax Act, s.128.1(4) — Department of Justice
  • CRA guidanceDispositions of property for emigrants of Canada — Canada Revenue Agency

• What's exempt: registered accounts (RRSP, TFSA, FHSA, RESP), Canadian real estate, employer pension entitlements, CPP/QPP rights, and personal-use property under $10,000 are all excluded from the deemed disposition.

  • Primary lawIncome Tax Act, s.128.1(4) — "excluded rights or interests" and taxable Canadian property carve-outs
  • CRA guidanceDispositions of property for emigrants of Canada — Canada Revenue Agency

• The 60-month short-term resident rule: property owned before you last became a Canadian resident is generally exempt if you were resident for 60 months or less in the 10 years before you left.

  • Primary lawIncome Tax Act, s.128.1(4) — Department of Justice
  • CRA guidanceDispositions of property for emigrants of Canada — Canada Revenue Agency

• The spousal rollover: capital property can be transferred to a spouse or common-law partner at cost base before departure, deferring the gain until they eventually sell it.

  • Primary lawIncome Tax Act, s.73(1) — Department of Justice

The rate

• Capital gains inclusion rate: 50% for 2026 — half of the gain is added to taxable income. A proposed increase to 66.67% (on gains above $250,000) was announced in the 2024 federal budget, deferred, and then cancelled outright in March 2025 — the rate stayed at 50%.

  • CRA guidanceCapital Gains — Guide T4037 — Canada Revenue Agency
  • CRA guidancePrime Minister Carney cancels proposed capital gains tax increase — March 21, 2025

Forms & deferral

• T1161 — list of properties owned on departure, required if their combined fair market value exceeds $25,000.

  • CRA guidanceForm T1161 — List of Properties by an Emigrant of Canada — Canada Revenue Agency

• T1243 — the deemed disposition calculation itself, filed with the final Canadian return in the departure year.

  • CRA guidanceForm T1243 — Deemed Disposition of Property by an Emigrant of Canada — Canada Revenue Agency

• T1244 — election to defer payment of the departure tax under subsection 220(4.5) until the property is actually sold. Adequate security isn't required for the first $16,500 of federal tax owing under this election (subsection 220(4.51)).

  • Primary lawIncome Tax Act, s.220(4.5)–(4.51) — Department of Justice
  • CRA guidanceForm T1244 — Election to Defer Payment of Tax — Canada Revenue Agency

What this calculator doesn't model

The marginal tax rate is a number you supply, not one we compute — it's not broken down by federal vs. provincial bracket, and provincial rates vary widely. Alternative Minimum Tax, treaty-based relief, and business-property valuation rules aren't modeled. None of this replaces a filing prepared by a cross-border accountant — see the full guide for the plain-English walkthrough, and the estimator's own "Also worth knowing" section for calculator-specific caveats.

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The treaty rates

• Default non-resident withholding: Canada withholds 25% on RRSP/RRIF payments made to a non-resident, before any treaty relief applies.

  • Primary lawIncome Tax Act, s.212(1) — Department of Justice (Part XIII tax)
  • CRA guidanceNon-Residents and Income Tax — Guide T4058 — Canada Revenue Agency

• The Canada-US tax treaty caps withholding at 15% of the gross amount for a "periodic pension payment" — the rate that qualifying RRIF payments get, versus a lump-sum RRSP collapse.

  • Primary lawCanada-US Tax Treaty, Article XVIII(2) — Department of Finance (consolidated treaty text)

• What counts as "periodic": a RRIF payment loses treaty eligibility for the year once total payments exceed the greater of twice that year's CRA-mandated RRIF minimum, or 10% of the RRIF's fair market value at the start of the year.

  • Primary lawIncome Tax Conventions Interpretation Act, s.5 — Department of Justice ("periodic pension payment" definition)

RRIF mechanics

• An RRSP must mature — converted to a RRIF, used to buy an annuity, or cashed out — by December 31 of the year the holder turns 71.

  • Primary lawIncome Tax Act, s.146(2) — Department of Justice
  • CRA guidanceRRSPs and Other Registered Plans for Retirement — Guide T4040 — Canada Revenue Agency

Section 217 election

• Non-residents can elect under Section 217 to be taxed on eligible Canadian-source pension income — including RRIF payments — at graduated resident rates instead of the flat withholding rate, which can produce a refund of some of the tax withheld at modest income levels.

  • Primary lawIncome Tax Act, s.217 — Department of Justice
  • CRA guidanceElecting under section 217 — Canada Revenue Agency

The US side

• The IRS recognizes RRSP/RRIF tax deferral automatically — no separate election or Form 8891 filing is required, as long as you keep filing US returns and report distributions as income when taken.

  • IRS guidanceRevenue Procedure 2014-55 — Internal Revenue Service

• Canadian withholding tax on the withdrawal generally becomes a Foreign Tax Credit against US tax on that same income.

  • IRS guidanceAbout Form 1116, Foreign Tax Credit — Internal Revenue Service

What this calculator doesn't model

This estimator applies the flat 25%/15% treaty rate you select — it doesn't model the Section 217 refund math, the US-side Foreign Tax Credit limitation, or whether a given RRIF withdrawal schedule actually qualifies as "periodic" with your financial institution. See the full guide for the plain-English walkthrough, and confirm "periodic" status with your RRIF's carrier before withdrawing.

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CPP (Canada Pension Plan)

• Claimable from age 60 to 70. Starting before 65 reduces the pension 0.6% for each month early (up to 36% less at 60); starting after 65 increases it 0.7% for each month delayed (up to 42% more at 70).

  • Primary lawCanada Pension Plan Regulations, s.46 — Department of Justice (adjustment factors)
  • Government guidanceCanada Pension Plan: How much you could receive — Government of Canada

OAS (Old Age Security)

• Deferring past 65 increases the pension 0.6% for each month delayed, up to 36% more at 70. OAS is claimable from 65 to 70 — there's no early option.

  • Primary lawOld Age Security Act, s.7.1 — Department of Justice
  • Government guidanceOld Age Security: How much you could receive — Government of Canada

• A full OAS pension requires 40 years of Canadian residency after age 18; fewer years generally means a prorated partial pension (years lived in Canada ÷ 40).

  • Government guidanceOld Age Security: How much you could receive — Government of Canada

US Social Security

• Full Retirement Age (FRA) depends on birth year — 66 for people born 1943–1954, gradually rising to 67 for anyone born 1960 or later.

  • SSA guidanceSee your Full Retirement Age — Social Security Administration

• Claiming before FRA (as early as 62) reduces the benefit 5/9 of 1% per month for the first 36 months early, then 5/12 of 1% for each additional month — e.g. a 30% cut at 62 for someone with a 67 FRA.

  • Primary law20 CFR § 404.410 — Code of Federal Regulations
  • SSA guidanceRetirement Age and Benefit Reduction — Social Security Administration

• Delaying past FRA increases the benefit by 2/3 of 1% per month (8% per year), up to age 70.

  • SSA guidanceDelayed Retirement Credits — Social Security Administration

The Totalization Agreement

• The Canada-US Social Security Agreement lets you combine CPP/QPP contribution periods with US Social Security work credits to qualify for benefits in either country — a qualification bridge, not a change to the per-country reduction/delay math above.

  • Primary lawU.S.-Canadian Social Security Agreement — Social Security Administration (full treaty text)
  • SSA guidanceTotalization Agreement with Canada — Social Security Administration

How the benefit is taxed once it crosses the border

• Since a 1997 protocol to the treaty, CPP/QPP/OAS/Social Security paid to a resident of the other country are taxable only in the country of residence — CPP/OAS paid to a US resident is treated as US Social Security for tax purposes (up to 85% taxable); Social Security paid to a Canadian resident is treated as CPP, with 15% specifically exempt from Canadian tax.

  • Primary lawCanada-US Tax Treaty, Article XVIII(5) — Department of Finance (consolidated treaty text)
  • IRS guidancePublication 597, Information on the United States-Canada Income Tax Treaty — Internal Revenue Service

The WEP/GPO repeal (January 2025)

• The Windfall Elimination Provision and Government Pension Offset — which used to reduce US Social Security benefits for people also receiving a foreign pension like CPP — were repealed, retroactive to benefits payable for January 2024 and later.

  • Primary lawSocial Security Fairness Act, Public Law 118-273 — U.S. Congress
  • SSA guidanceSocial Security Fairness Act update — Social Security Administration

What this calculator doesn't model

This estimator applies the standard adjustment formulas above to the amounts you enter — it doesn't estimate your CPP or Social Security amount from a work history, model the Guaranteed Income Supplement or spousal/survivor benefits, or compute the actual tax on the benefit once it arrives (see "How the benefit is taxed" above for which country taxes it and roughly how much). See the full guide for the plain-English walkthrough.

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US tax brackets

• This simulator uses the 2026 US federal income tax brackets and standard deduction (e.g. $16,100 single / $32,200 married filing jointly) to find the cheapest withdrawal order.

  • IRS guidanceRevenue Procedure 2025-32 — Internal Revenue Service (2026 inflation adjustments)
  • IRS guidanceIRS releases tax inflation adjustments for tax year 2026 — Internal Revenue Service

RRSP withholding

This tool taxes the RRSP slice of each withdrawal at the 15% treaty rate or the marginal US rate, whichever is higher — see the RRSP Withholding Tax section above for the full citation on that 15%/25% treaty split.

What this calculator doesn't model

RRSP withdrawals are approximated with a simplified foreign-tax-credit assumption rather than actual Form 1116 basket/carryover mechanics. Capital-gains tax on taxable-brokerage withdrawals uses a flat rate applied to the full withdrawal, since this site doesn't track adjusted cost base. CPP, OAS, and Social Security are treated as entirely untaxed, though in reality Social Security can be up to 85% taxable and CPP/OAS are taxable income too. See the full guide for the plain-English walkthrough.

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The US exit tax

• The US exit tax is a separate regime from Canada's departure tax — it can apply to US citizens who renounce citizenship, or to a "Long-Term Resident" (a Green Card holder in 8 or more of the last 15 tax years) who formally gives up that status.

  • Primary law26 U.S.C. § 877A — Cornell Legal Information Institute (U.S. Code)

• A Long-Term Resident who expatriates is a "covered expatriate" — subject to the exit tax — if they meet any one of three tests: worldwide net worth of $2 million or more (not indexed); average annual net US income tax liability over the last five years above an inflation-adjusted threshold ($211,000 for 2026); or failing to certify five years of full US tax compliance on Form 8854.

  • Primary law26 U.S.C. § 877A(g) — Cornell Legal Information Institute (U.S. Code)
  • IRS guidanceRevenue Procedure 2025-32 — Internal Revenue Service (2026 threshold)
  • IRS guidanceAbout Form 8854 — Internal Revenue Service

CPP & OAS on return

CPP keeps accruing regardless of residency, and years of Canadian residency after you return continue counting toward OAS's 40-year full-pension calculation — see the Benefit Claiming-Age Optimizer section above for the citation on that 40-year rule.

What this calculator doesn't model

This tool tells you which US exit-tax tests apply and points you to the relevant forms — it doesn't calculate the tax itself (the exit tax's mark-to-market rules and exclusion amount are genuinely complex), and it doesn't model provincial healthcare waiting periods, which vary by province and aren't set by a single federal rule. See the full guide for the plain-English walkthrough.