TFSA holdings

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Anonymous Posted 2 days ago MadanCA Team edited answer 4 minuteutes ago

Hi Allan, I currently hold stocks in my TFSA and will be moving from Canada to the U.S. in summer 2026 for work for a couple of years.
I’ve heard that once I become a U.S. tax resident, income earned in a TFSA must be reported on U.S. tax returns. Given this, would you recommend selling/withdrawing my TFSA before departure?
Thanks
Natalie

1 Answer

score 0 · Answer 1 · 2026-01-19T17:39:37+00:00

Hi Natalie,

You’re asking the right question well in advance 👍

You’re correct that once you become a U.S. tax resident, a TFSA is not recognized as tax-free by the U.S. From a U.S. perspective:

Interest, dividends, and capital gains inside a TFSA are taxable annually
The account is not treated as a pension or registered plan
Additional U.S. information reporting may be required (e.g., foreign asset disclosures)

Because of this, many Canadians moving to the U.S. choose to collapse or withdraw their TFSA before becoming a U.S. tax resident, especially if the account holds active investments. A withdrawal before departure is tax-free in Canada and avoids ongoing U.S. tax and reporting complexity.

That said, the best approach depends on several factors, including:

When you will become a U.S. tax resident
Whether the move is temporary or long-term
The size and composition of your TFSA
Your broader Canada–U.S. tax situation

There’s no one-size-fits-all answer, but planning before the move is key. I offer a 30-minute paid consultation to review your facts and walk through the options so you can make an informed decision before summer 2026.

All the best,
Allan Madan, CPA, CA
Madan CPA Professional Corporation

TFSA holdings

1 Answer

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