Canadians may transfer their US 401K and IRAs to their RRSPs

November 2019 – Subject to certain conditions, a Canadian resident can ‘transfer’ their US 401(k) and IRA to their own Canadian RRSP on a tax deferred basis. These “Transfers” do not impact your RRSP room, and are in addition to what you can normally contribute to your RRSP. There are US tax consequences to be aware of as there are mandatory withholding taxes on the withdrawal, but a foreign tax credit or similar deduction will offset this when you file your Canadian tax return. If your 401(k) is not eligible for rollover directly to an RRSP (i.e. benefits were not attributable to services rendered by you or your spouse while a non resident of Canada) it can be rolled into an IRA that qualifies for transfer to an RRSP. The rules for transferring an IRA to an RRSP are very similar, although any employer contributions will not qualify, and you do not have to be a non resident for your contributions to be considered eligible. It is important to consider the implications of transferring a 401(k) or IRA from the US to a Canadian RRSP. Plans may have stipulations to consider first. Get professional advice to make sure this strategy is right for you.