Rollver from 401(k) plan to the Canadian system

[Guest Robes99]

If a Canadian resident alien has terminated service from his U.S. company and moved back to Canada, is there a way he can "rollover" his 401(k)/Profit Sharing Balance from his U.S. company into a Canadian "IRA".

[david rigby]

Entirely dependent on Canadian tax law.

[BFree]

Perhaps the unasked question is:

Is this rollover free from U.S. tax implications?

[mbozek]

Why not US taxation? 401(k) distributions to a Canadian are US source income subject to US income taxation. Under US- Canada tax treaty, distributions payable to Candaian citizens from US plans may subject to 15% withholding. I dont believe the payments are exempt from US taxation. Need to check IRS publication on US tax treaties to determine taxation of benefits. Its on IRS web site.

[Guest b2kates]

I agree with Mbozek. There is nothing in US law that permits tax free rollover to nonUS plans. therefore purely governed by Treaty.

Earned but not taxed as ordinary income in U.S. Likely taxed in U.S. when distributed. Issue becomes is participant now a nonresident alien when account distributed. I think under the NRA rules there is a tacking effect from when the contributions were earned.

Brett