{"id":27344,"date":"2022-08-02T12:31:05","date_gmt":"2022-08-02T16:31:05","guid":{"rendered":"https:\/\/www.moneysense.ca\/?p=268440"},"modified":"2022-08-02T12:31:05","modified_gmt":"2022-08-02T16:31:05","slug":"u-s-withholding-tax-in-an-rrsp-for-canadians","status":"publish","type":"post","link":"https:\/\/www.moneysense.ca\/columns\/ask-moneysense\/us-withholding-tax-in-an-rrsp-for-canadians\/","title":{"rendered":"U.S. withholding tax in an RRSP for Canadians"},"content":{"rendered":"
<\/div>\n

How much is withholding tax on U.S. dividends?<\/strong><\/h2>\n

I am going to provide a brief summary of U.S. withholding tax on investments, Wanda, before addressing Enterprise Products Partners (EPD) specifically.<\/p>\n

First, U.S. stocks are generally subject to 30% withholding tax on dividends for non-residents. Many countries, including Canada, have tax treaties with the U.S. to ensure a reduced rate of withholding tax. For qualifying Canadian residents, the tax can be reduced to 15%. In a registered retirement savings plan<\/a> (RRSP)<\/a>, the tax may be reduced to 0%. <\/p>\n

Qualifying to reclaim U.S. withholding tax<\/strong><\/h2>\n

In order to qualify, an investor has to fill out this form and provide it to their investment firm: Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)<\/a>. <\/p>\n

These forms are generally valid until the end of the third calendar year after signing, so it needs to be re-signed every three years.<\/p>\n

U.S. stock dividends paid into an RRSP, registered retirement income fund<\/a> (RRIF) or a similar registered retirement account are generally free from withholding tax for Canadian residents who have completed W-8BEN forms. In non-registered and tax-free savings accounts<\/a> (TFSAs)<\/a>, the reduced 15% rate generally applies. <\/p>\n

If excess tax is withheld, it can be recovered by filing a U.S. tax return. However, the time and cost may be more than the potential refund unless the withholding tax is significant.<\/p>\n

An important point is that Canadian mutual funds and exchange-traded funds (ETFs) that own U.S. stocks are considered Canadian investments and subject to 15% withholding tax. If you own these in your RRSP, they will not qualify for the 0% withholding tax rate. This is because the mutual fund or ETF is considered the shareholder of the U.S. stocks, not you or your RRSP. <\/p>\n

EDP dividends for Canadians<\/strong><\/h2>\n

In your case, Wanda, you own shares of Enterprise Products Partners, which is a master limited partnership trading on the New York Stock Exchange (NYSE). Based on the current quarterly dividend and stock price, the annual dividend yield is about 7.15%. <\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

How much is withholding tax on U.S. dividends? I am going to provide a brief summary of U.S. withholding tax on investments, Wanda, before addressing Enterprise Products Partners (EPD) specifically. First, U.S. stocks are...<\/p>\n","protected":false},"author":1,"featured_media":27346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[5,7,10,13],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27344"}],"collection":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/comments?post=27344"}],"version-history":[{"count":0,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27344\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media?parent=27344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/categories?post=27344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/tags?post=27344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}