David A. Altro was quoted in Paul Delean’s column “Quebec tax credit may help retirees who returned to labour force in 2020” in the Montreal Gazette.
To read the article you can see it in part below, or click here to view it on Montreal Gazette’s website.
Quebec tax credit may help retirees who returned to labour force in 2020
the Montreal Gazette
February 1, 2021
Q: My partner, a dual Canada-U.S. citizen born in Canada, moved back here in 2019 after more than 40 years in the U.S. In 2019, she filed tax returns for Canada and Quebec. Our financial adviser told her that as a U.S. citizen, she could not open a TFSA (tax-free savings account) because the U.S. does not recognize it and would tax her on any amount she earned. Is this so?
A: It’s not prohibited for U.S. citizens in Canada to have a TFSA, but “it definitely is a bad idea,” said cross-border tax expert David Altro of Altro LLP. American citizens must file U.S. tax return 1040 annually no matter where they reside, and under the rules of the U.S. Internal Revenue Service, TFSA income is not exempt from U.S. taxes. Your partner might also be required to file a statement known as the Foreign Bank Accounts Report (FBAR) if the total value of her holdings in Canadian banks is $10,000 or more at any point in the year, Altro said, with additional penalties possible if the IRS classifies the TFSA as a passive foreign investment company.