Can I deduct US retirement plan contributions if I live in Canada?
That is the situation Form RC268 is built for. A Canadian resident who works in the United States, on assignment or for part of the year, and who contributes to a United States retirement plan through that work, claims the deduction on this form. The claim rests on the treaty rather than on ordinary deduction rules, so the plan has to be a United States plan and the contributions have to relate to your work there. One group sits outside it: a person who commutes across the border to work each day is not covered. Keep the plan statements and the payroll records that show what went in and when, because the claim is only as good as the evidence behind it.
Does commuting across the border each day stop me claiming RC268?
Yes. The form is written for a Canadian resident who is not a daily commuter, so the daily cross border commuter is the one worker it does not reach, even where the plan and the contributions look identical to a colleague's. This catches people who change pattern partway through a year. If you spent some of the year on assignment and the rest of it commuting, the two periods are not the same for this purpose, and the file should show which contributions belong to which. Work out the pattern first, from travel records and the employer's own account of the posting, and only then decide what the return claims.
Will an RC268 claim affect my Canadian registered plan room?
It interacts with it, and that is the reason to get the claim right rather than approximately. The deduction is treaty based, and it sits alongside the room you have for Canadian registered contributions. A claim made carelessly can cost you contribution space in the following year as well as accuracy in this one. Practically, that means the United States plan contributions and any Canadian registered contributions for the same year should be looked at together before either is finalised, not in two separate conversations months apart. If you are contributing to both, say so at the start of the engagement rather than when the return is being drafted.
Does Form RC268 apply if I worked in the United States for part of the year?
Yes. The form contemplates a Canadian resident who works in the United States on assignment or for part of the year, so a partial year is ordinary rather than exceptional. What matters is matching contributions to the period they relate to. Payroll for a split year often runs on two systems, and the year end statement may show a single total with no breakdown. The work is usually reconciliation: establish the dates of the assignment, obtain the plan statements that cover them, and then decide what the return claims. Do that before the return is drafted, because unpicking it afterwards means an adjustment instead of a filing.
Is the RC268 deduction a treaty claim or an ordinary deduction?
It is treaty based, and the distinction is not academic. An ordinary deduction stands on the domestic rules alone. A treaty based one stands on the agreement between the two countries, which is why the plan has to be a United States plan and why your own status as a Canadian resident forms part of the test rather than the background to it. In practice this changes what the file has to contain. You are supporting a position, not simply entering a figure, so the working papers should record the plan, the employment that generated the contributions, and the period of the assignment. If the CRA asks later, that record is the answer.
What paperwork is needed before Form RC268 can be completed?
Plan statements for the year, showing the contributions and the dates they were made. Payroll records from the United States employment, so the contributions can be tied to that work. Something that fixes the period of the assignment, which can be the assignment letter itself. And the details of any Canadian registered contributions for the same year, because the two have to be considered together. Gather all of it before the return is drafted. The usual delay is a plan administrator in another country taking weeks to produce a statement, and that is worth starting early rather than discovering during filing season.
Do Canada and the United States share tax information?
Yes, through more than one channel. The treaty has an exchange-of-information article that supports both routine and on-request exchange. Separately, an intergovernmental agreement has Canadian financial institutions identify US-reportable accounts and report them to the CRA, which passes them to the IRS, with the reverse flow for Canadian residents. Most other country pairs use the Common Reporting Standard for the same purpose. See FATCA reporting.
What happens if I have not filed for several years?
Missed years are handled as one package, not one at a time, because the route chosen for the first year determines the relief available for the rest. Each country has a disclosure or relief programme with its own conditions, and entering the right one — before the authority contacts you — is usually what keeps penalties down. Filing quietly outside a programme forfeits that protection. See catching up on missed returns.
