IRA contribution for the partial year if moving to Canada

[APPNOV2014NY]

Hello All,

I could not find relevant information at web hence asking this question.

This is the question for all the people working in USA and moving to Canada. Are we allowed to make full $5500 IRA contribution even though we were partial year resident of US. For ex - Let's say we move to Canada in April 2018 and would be non-resident for 2018 for tax purposes. Can we still make full contribution to IRA for year 2018?

Thanks!!

 

[trumprefugee]

Not sure if you already found an answer to this, but I have been doing a lot of tax and financial planning since landing almost 3 weeks ago and was just thinking about my IRAs. For US citizens, the answer is yes (for tax purposes we US citizens will forever be considered "resident"). Not sure about the answer for non-US citizens. However, it is also recommended that US citizens stop making contributions to IRAs and 401(k) accounts after becoming Canadian residents. Canada does not allow a tax deduction for contributions to 401(k) or traditional IRAs.

You have to make an election to have Canada defer tax on gains in Roth IRAs in order to enjoy the benefits of a Roth IRA, but if you make any Roth IRA contributions as a Canadian resident, it would undo the election and Canada would tax you on all Roth IRA gains, so it is especially crucial for US citizens not to make any Roth IRA contributions after becoming Canadian residents:
https://serbinski.com/roth-ira-when-moving-canada