Canadians Moving to the US


Canadian residents move to the U.S. for different reasons. Some Canadians are snowbirds who simply want to extend their yearly stay down south, others may be moving south to start a business or take a lucrative new job opportunity, and still others may be marrying Americans. Some Canadian residents are from the US, and after having lived and worked in Canada for some years, are choosing to return home.

Whether you are a Canadian citizen who is already living in the U.S. or a Canadian resident moving to or returning to the U.S., there are various cross border financial planning matters to consider. These matters span from immigration to tax planning and health care in addition to currency exchange, and estate, investment, and retirement planning.

Three of the cross border financial planning topics that are most important to our clients are highlighted below.


Optimal US Immigration Path

A threshold issue for many Canadians moving to the U.S. is designing an optimal U.S. immigration path.

There are typically three ideal routes to successful U.S. immigration: the family-based, investor-based and employment-based visa paths. If available, the family-based path to U.S. immigration is ideal as there is no waiting list for certain categories of family-based visas (such as spouses of U.S. citizens). The investor path can be ideal for those Canadians who do not have immediate U.S. relatives who can sponsor their visa applications. The E-2 investor visa and EB-5 investor visa each offer immigration routes to the U.S. for Canadians who would like to invest funds in an already-existing U.S. business or who wish to start their own business in the U.S. Various employment-based visas also exist for Canadians who will be moving to the U.S. and working for U.S. companies.

As there are a variety of routes south of the border, we work with our clients to clarify the advantages of each one, determining the most suitable path for every individual’s unique situation.


Tax Planning Opportunities

Another cross border financial planning issue that Canadian residents moving to or Canadian citizens already living in the U.S. must carefully navigate is tax planning.

First, upon exiting Canada, those moving to the U.S. may have to pay Canadian departure tax. Departure tax can be deferred, mitigated or even eliminated. As such, a comprehensive plan for handling departure tax should be established prior to moving to ensure that Canadian residents are aware of what to do with each asset and to ensure that they benefit from available tax planning opportunities.

Another question Canadians have about moving to the U.S. is how to handle their RRSPs. Canadians who are already living in the U.S. wonder the same thing, as many Canadians have established RRSPs before they move south of the border.

Fortunately, RRSPs can provide tax-saving opportunities for U.S. residents. With appropriate cross border financial planning in place, a U.S. resident may be able to withdraw their RRSP and pay tax as low as 15%, compared to the top marginal rate of over 53% that Canadian residents pay upon withdrawing their RRSPs.

There are typically many tax savings associated with becoming a U.S. tax resident. Since Canada and the U.S. each have strict domestic rules regarding tax residency, we help clients clearly establish U.S. tax residency by utilizing the factors outlined in the Canada-U.S. Tax Treaty prior to departure. That way, upon arrival in the U.S., the plan for becoming a U.S. tax resident can be promptly executed, and clients can capitalize on tax saving opportunities such as the one outlined above, in addition to benefiting from the typically low U.S. income tax rates and avoiding double taxation by the CRA and IRS.

Finally, when U.S. citizens and permanent residents pass away, federal estate tax is applied to their gross worldwide estate (including some life insurance proceeds) at the same rate as gift tax: up to 40%—a large percentage of one’s estate. (State-levied estate tax may also apply, depending on one’s state of residence.)

If estate planning is done effectively, estate tax can be mitigated or even avoided by holding assets in certain vehicles. Our main goal is to help clients protect their assets from estate tax on both the federal and state-wide levels so their estates will be as robust as possible for future generations inheriting wealth.


US Health Care Options

Many Canadians who move to and live in the U.S. are also concerned about health care. U.S. residents generally have three options for obtaining U.S. health insurance: i) via an employer; ii) via private purchase; or iii) via federal government programs such as Medicare, for retirees.

Eligibility for Medicare begins at age 65 for U.S. citizens and for permanent residents who have been legally living in the U.S. for at least five years. However, Medicare is not fully subsidized by the U.S. government, and many of our clients move to the U.S. well before the age of 60, meaning they will have to wait even more than five years to receive Medicare coverage.

For Canadians who are not marrying Americans and Canadians who do not plan on working in the U.S., purchasing private health insurance becomes the most viable U.S. health care option. While private insurance can be expensive, there are ways to reduce or offset this cost.

One of our most important objectives as your cross border team is to ensure that you have adequate health insurance coverage as a U.S. resident. Our goal is to provide you with peace of mind regarding both your physical and financial health by employing cross border planning strategies that can help you obtain the right insurance coverage at an affordable cost.


Cross Border Financial Planning: Our Process

Our role as your cross border advisors is to review your current situation from all of the above angles, help you pave a smooth pathway to the U.S., and assist you in creating a secure, comfortable lifestyle as a U.S. resident.

The most effective way to accomplish these goals is to establish and follow a comprehensive cross border financial plan.  As such, we work with you from day one to create a customized cross border financial plan that serves as your roadmap to moving to the U.S., returning home to the U.S. from Canada and/or living in the U.S.

To begin the process of creating and implementing your cross border financial plan, the first step is to request a consultation with our team of professionals.

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