IRS Issues Tax Relief for U.S. Citizens and Residents with Canadian Retirement Plans

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In Revenue Procedure 2014-55, issued on October 7, 2014, the IRS provided tax relief for U.S. citizens and residents with Canadian registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs). The general rule is that a U.S. citizen’s or resident’s accrued but undistributed income in an RRSP or RRIF is subject to U.S. federal taxation. For Canadian tax purposes, such income is not taxable until a distribution is actually received. The difference in the U.S. and Canadian tax rules creates a mismatch in the timing to recognize the income from an RRSP or RRIF. This results in double …read more

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