Chapter 9 of IRS Publication 17 (printed pages 77 to 91 in the 2025 edition, 78 to 92 in 2023 and 2024) covers traditional and Roth IRAs, and it is where foreign retirement accounts and IRAs first collide. The chapter never names an RRSP, TFSA, provident fund or other foreign plan. Foreign matters appear only where the foreign earned income exclusion changes the figures and where an IRA payment goes abroad. It matters to U.S. citizens abroad, green card holders with a Canadian or Indian nest egg, and newcomers who want an IRA. These are unofficial study notes in our own words; the IRS publication controls.
What Pub 17 says about foreign retirement accounts and IRAs, and where it stops
| Topic (2025 page) | Pub 17 says | Cross-border catch |
|---|---|---|
| Who can contribute (78 to 79) | Taxable compensation: wages, self-employment profit, commissions | Excluded foreign earned income and housing amounts are not compensation |
| Annual limit (79) | The smaller of $7,000 ($8,000 at 50 or older) and compensation | One limit covers all traditional and Roth IRAs |
| Modified AGI (81, 82, 89) | Worksheets add the exclusion and housing deduction back | Excluded pay still counts for the deduction and Roth phase-outs |
| Rollovers into a traditional IRA (83) | A traditional IRA, an employer's qualified plan, a section 457 plan or a section 403(b) plan | No foreign plan is listed, so we treat a move into an IRA as a taxable withdrawal |
| Payments sent abroad (86) | A citizen or resident with a foreign home address cannot opt out of withholding on traditional IRA payments | Expect U.S. withholding on IRA money taken after you move |
How do I handle an RRSP or RRIF on a U.S. return?
- Test eligibility under Rev. Proc. 2014-55: you met every U.S. filing requirement as a citizen or resident, you never reported the plan's undistributed income on a U.S. return, and you reported all distributions as if you had elected. If so, you are treated as electing treaty deferral under Article XVIII(7), plan by plan, from the first year.
- If you reported the growth before, you are not an eligible individual and must ask the Commissioner for consent to elect.
- File no Form 8891, 3520 or 3520-A for the plan. The revenue procedure keeps the FBAR and Form 8938 duties, and the IRS FBAR manual calls foreign plans such as an RRSP normally reportable. The FBAR applies when foreign accounts total over $10,000 at any time in the year.
- Report withdrawals under Code section 72, subject to the treaty. Canada withholds 25% from non-residents unless a treaty reduces it, and the treaty caps tax on a periodic pension payment at 15%. Claim the Canadian tax as a credit; see foreign tax credits.
A Roth IRA runs the other way. The 2007 Protocol makes it a pension under the treaty, but growth after a contribution made by or for a Canadian resident stops qualifying, so ask your Canadian CPA before funding one while you live in Canada.
What about a TFSA, RESP, FHSA, EPF, PPF or NPS?
Rev. Proc. 2014-55 covers only plans within Article XVIII(7), and it names the RRSP and RRIF. We found no IRS document naming the RESP, FHSA, EPF, PPF or NPS. The only IRS document we found naming the TFSA is the FBAR Reference Guide (Pub 5569, Rev. 3-2022), which lists it as reportable on the FBAR.
| Plan | What the IRS has said | What still applies |
|---|---|---|
| TFSA | Named as FBAR-reportable in Pub 5569; we found nothing on its income tax. We treat growth as taxable and the account as a foreign trust | FBAR and Form 8938; on our reading Forms 3520 and 3520-A, unless you rely on the proposed exemption for trusts worth $50,000 or less in total (proposed, not final; the figure would be indexed) |
| RESP | We found nothing by name; its purpose may fit the education category of Rev. Proc. 2020-17 | That relief covers trust forms, not income tax |
| FHSA | We found nothing by name | We found no U.S. deduction for contributions; the deduction is Canadian |
| EPF | We found no IRS, FinCEN or CRA statement by name | Form 8938 value is market value at year-end if you know it, else distributions received, else zero; FBAR status is open; see the EPF guide |
| PPF, NPS | We found nothing by name; India's tax treatment does not bind the IRS | Document a position |
The Form 3520 instructions let you rely on the proposed rules if you apply them in full and consistently. Form 8938 applies to specified foreign assets, including pension interests, above $50,000 at year-end or $75,000 at any time (unmarried, living in the United States) or $200,000 and $300,000 (living abroad). See the RRSP, TFSA and RESP guide.
How do foreign pay and the exclusion change my IRA room?
- Start with taxable compensation and drop anything you exclude. Page 79 says excluded foreign earned income and housing costs are not compensation.
- Your limit is the smaller of the dollar limit and that compensation.
- If you claim the foreign tax credit instead of the exclusion, the wages stay taxable and count as compensation. Taking the credit in a later year revokes an earlier exclusion choice (Pub 54), and choosing the exclusion again within five years needs IRS approval.
- For the traditional deduction when covered at work, and for Roth eligibility, add the exclusion and housing deduction back to AGI (Worksheets 9-1 and 9-2).
- On a joint return, a spouse's taxable pay can support the other spouse's IRA (page 79), but not if it is all excluded.
Page 80 says the Form W-2 retirement plan box shows whether you are covered at work. Neither Pub 17 nor Pub 590-A says whether a foreign employer plan counts, so treat that as open.
By tax year: 2023, 2024, 2025 and 2026
| Tax year | IRA limit | Age-50 catch-up | Roth phase-out, single | Deduction phase-out, covered, single | Foreign earned income exclusion |
|---|---|---|---|---|---|
| 2023 | $6,500 | $1,000 | $138,000 to $153,000 | $73,000 to $83,000 | $120,000 |
| 2024 | $7,000 | $1,000 | $146,000 to $161,000 | $77,000 to $87,000 | $126,500 |
| 2025 | $7,000 | $1,000 | $150,000 to $165,000 | $79,000 to $89,000 | $130,000 |
| 2026 | $7,500 | $1,100 | $153,000 to $168,000 | $81,000 to $91,000 | $132,900 |
| Tax year | RRSP dollar limit (CAD) | TFSA dollar limit (CAD) | IRS average, CAD per USD | Treasury 31 Dec, CAD per USD |
|---|---|---|---|---|
| 2023 | 30,780 | 6,500 | 1.350 | 1.326 |
| 2024 | 31,560 | 7,000 | 1.370 | 1.438 |
| 2025 | 32,490 | 7,000 | 1.398 | 1.369 |
| 2026 | 33,810 | 7,000 | not yet published | published after year-end |
2026 planning figures; Pub 17 (2026) is not yet published. The Form 8938 thresholds are the same in the November 2021 instructions for 2023 to 2025, and no change is published for 2026.
A short example
Kavita, single and 38, is a U.S. citizen in Mississauga with a 2025 salary of C$139,800 and no other income. C$139,800 ÷ 1.398 = $100,000.00.
- Exclusion route: she excludes the full $100,000 on Form 2555 (the 2025 limit is $130,000). Compensation is $100,000 − $100,000 = $0, so her IRA limit is the smaller of $7,000 and $0, which is $0.
- Credit route: she takes the foreign tax credit instead. Compensation is $100,000, the limit is $7,000, and modified AGI of $100,000 is under $150,000, so a full $7,000 Roth contribution is open to her. Whether it suits her while living in Canada is a treaty question for her Canadian CPA.
Mistakes to avoid
- Filing Form 8891 for an RRSP or RRIF.
- Reporting RRSP growth yearly "to be safe", which rules out the automatic election.
- Leaving a registered plan off the FBAR or Form 8938 because it is sheltered at home.
- Funding an IRA from pay excluded on Form 2555.
- Treating the proposed $50,000 trust rule as final law, or assuming the RRSP relief covers a TFSA.
Check yourself
Question 1 (tax year 2025)
Rahul, 52, excludes $90,000 of foreign pay on Form 2555 and has $4,000 of taxable U.S. consulting profit after all adjustments. What is his IRA limit?
Answer: Only the $4,000 counts as compensation. The limit is the smaller of $8,000 (the $7,000 limit plus the $1,000 catch-up) and $4,000, so $4,000.
Question 2 (tax year 2025)
Tom, 36 and single, has $120,000 of taxable wages (his AGI) after excluding a further $37,500 of foreign pay on Form 2555, and no other IRAs. What is his Roth limit?
Answer: Modified AGI is $120,000 + $37,500 = $157,500. The reduction is $7,000 × ($157,500 − $150,000) ÷ $15,000 = $3,500, so his limit is $7,000 − $3,500 = $3,500.
Question 3 (tax year 2023)
A single filer, 40, has modified AGI of $150,000 and ample compensation. What is the Roth limit?
Answer: The range is $138,000 to $153,000, a width of $15,000. The reduction is $6,500 × ($150,000 − $138,000) ÷ $15,000 = $5,200, so the limit is $6,500 − $5,200 = $1,300.
Question 4 (tax year 2025)
Neha has reported her RRSP's yearly growth on Form 1040 since 2018. Is she an eligible individual?
Answer: No. Having reported undistributed income rules her out, so she must ask the Commissioner for consent to elect.
Question 5 (tax year 2025)
Alisha, an unmarried U.S. citizen, was a bona fide resident of Canada all year. On 31 December 2025 she held an RRSP of C$280,000 and a TFSA of C$42,000. Is Form 8938 required at the Treasury rate of 1.369?
Answer: C$322,000 ÷ 1.369 = $235,208.18. That is over $200,000, so Form 8938 is required, and the FBAR too.
How we can help
We are a U.S. CPA firm in the Aurora, Illinois area. We classify each foreign plan, prepare the FBAR, Form 8938 and any trust forms, and coordinate with your Canadian CPA or Indian Chartered Accountant so the filings agree. See foreign account and asset reporting and cross-border tax services.
Frequently asked questions
Does an RRSP go on the FBAR if I never file Form 8891?
Yes, if your foreign accounts pass the FBAR threshold. Rev. Proc. 2014-55 relieves only Forms 8891, 3520 and 3520-A.
Can I deduct EPF or RRSP contributions on my U.S. return?
We found no U.S. rule or treaty article for EPF. For Canadian plans, the Canada treaty allows a U.S. deduction only in narrow cases: paragraph 8 of Article XVIII for some temporary employees, and paragraph 13 for a U.S. citizen resident in Canada who works there for a Canadian employer. The plan must be one the competent authorities accept as qualifying, an individual plan with no employer involvement is outside the definition, and the U.S. benefit is capped at the limit for a comparable U.S. plan.
What is the IRA limit for 2026?
The planning figure is $7,500, plus $1,100 at age 50 or older.
Official sources
- IRS Publication 17 (2025), chapter 9
- IRS Publication 590-A (2025), Contributions to IRAs
- IRS Revenue Procedure 2014-55, Canadian retirement plans
- IRS Revenue Procedure 2020-17, tax-favored foreign trusts
- IRS Instructions for Form 3520 (Rev. December 2025)
- IRS Instructions for Form 8938 (Rev. November 2021)
- CRA: RRSP, TFSA and other plan limits
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.