Claiming U.S. withholding tax is only possible in recognized tax-deferred registered accounts and non-registered accounts. The U.S. only recognizes an RRSP and not an RESP or TFSA. Therefore, for a registered account, it is only possible for RRSP account and any foreign taxes in an RESP and TFSA cannot be recovered. Outside a registered account, you can claim withholding taxes on your Schedule 1 or Form W8 for U.S. dividends, which ensures you don’t pay tax on the same income in both Canada and the foreign jurisdiction.

Key Takeaways:

• Inside an RRSP there is no need to report anything for foreign taxes paid, and there is no immediate recovery of the tax, either.
• Foreign taxes paid in an RRSP will reduce the amounts of money available for distribution to you on retirement.
• Foreign investments in RPPs, PRPPs, RRSPs, RRIFs, RESPs, RDSPs, or TFSAs do not have to be reported on a T1135 Foreign Income Verification Statement.

“RRSPs are exempt from U.S. withholding taxes but RESPs and TFSAs are not. This is because the U.S. does not recognize them as tax-deferred registered accounts.”

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