Do I file Form RC268 even if no tax is owed?
Relief or credit claim obligations of this kind are generally required on the facts rather than on the tax result, so a nil position does not remove one. Canadian residents working in the United States on assignment or part of the year who contributed to a US plan.
What happens if I have missed Form RC268 for several years?
Missed years are dealt with as a package rather than one at a time, because the route chosen for the first year affects the relief available for the rest. We map the years and the obligations before anything is filed.
Is Form RC268 the same as the other reports I already file?
No. Deducts contributions to a US retirement plan by a Canadian resident who is not a daily commuter. Satisfying a different obligation, even one covering the same accounts or entity, does nothing for this one.
I live in Canada and work in the United States. Are my plan contributions deductible?
Possibly, and the route is Form RC268 rather than an ordinary deduction line. The relief is treaty-based, not domestic, so the questions are whether you were resident in Canada, whether the arrangement is a US retirement plan the treaty between Canada and the United States recognises for this purpose, and whether you were something other than a daily commuter across the border. Each of those is answered from documents: the plan description, your payroll records and your pattern of presence. A claim made without those on file is the kind that gets queried later, so we assemble them first and claim afterwards.
Does an RC268 deduction reduce my Canadian registered-plan contribution room?
Treat the two as connected rather than separate. A deduction for contributions to a US plan is not without consequences on the Canadian side: the same arrangement that gives you the deduction this year is designed to affect the room you have for Canadian registered-plan contributions afterwards. That makes the form worth getting right in both directions. Claim nothing and you may pay more Canadian tax than you need to. Claim without following the effect through and the next year's registered contributions can be made on room that is no longer there. We calculate the deduction and the knock-on effect together.
What does the daily commuter test on Form RC268 actually mean?
It is a distinction about how you work across the border rather than about where your employer sits. The form is aimed at a Canadian resident working in the United States on assignment or for part of the year, and it treats someone who crosses the border to work each day as a different case. So the evidence that matters is your pattern of presence: the assignment letter, the dates you were in the United States, and how the employment was actually carried out. We establish which side of that line you are on before anything is claimed, because the whole deduction rests on it.
My US assignment started part way through the year. Does RC268 still apply?
A part-year assignment is the ordinary case rather than the awkward one, since the form contemplates a Canadian resident who worked in the United States for part of the year. What changes is the arithmetic and the documentation. Contributions made before the assignment began, or after it ended, do not sit in the same place as the ones made while you were working in the United States, and payroll records rarely present them that way. The work is to separate the year into periods, tie contributions to each period, and claim only what belongs in the claim.
How are my US employer's own contributions to the plan treated in Canada?
Keep that question separate from your own contributions. Form RC268 is the vehicle for the deduction you take for contributions to the US plan. Whether an amount your employer puts in is included in your Canadian income for the year is a distinct question, answered by the treaty and by how the plan itself is constituted. The two are usually settled together because they draw on the same documents, but they do not have the same answer, and assuming they do is where these returns go wrong. We read the plan documentation and the payroll detail before deciding either point.
I never claimed this deduction in earlier years. Can those returns be corrected?
Usually yes, by asking for each affected year to be adjusted rather than putting everything into the current return. Two things make this more involved than it looks. Each year needs its own supporting position — residency, the plan, the contributions actually made in that year — so the request is really several small files rather than one letter. And because the deduction affects Canadian registered-plan room, correcting an earlier year changes the picture in the years after it. We work the years in order, oldest first, so the figures carry through consistently.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
