For Canadians, a move to the United States is usually planned around jobs, visas and housing — with tax handled “once we’re settled.” That ordering is expensive. Several of the most powerful planning tools in a Canada-to-US move are only available before US tax residency begins, and a few of the worst outcomes are locked in on day one.

Here is what to think about, in roughly the order it matters.

1. Know when US residency actually starts

You can become a US tax resident well before a green card arrives. The substantial presence test counts your days: roughly, 183 weighted days across three years (all of this year’s days, one-third of last year’s, one-sixth of the year before) makes you a US tax resident. Workations, house-hunting trips and long visits all count.

The start date matters because from that day, the US taxes your worldwide income. Planning the start date — and knowing about first-year elections and the treaty tie-breaker — is step one of every move.

Snowbirds who are not moving at all should know this test too: spending half of each year in the US can create US residency by accident, and the Form 8840 closer connection statement is the routine defence.

2. Canada’s departure tax meets the US basis rules

When you cease Canadian residency, Canada generally treats you as having sold most of your assets at fair market value — the departure tax — and taxes the accrued gains. The US, however, does not automatically give you a stepped-up basis for the same assets: left unmanaged, the same gain can be taxed twice, once by Canada on exit and again by the US on actual sale.

The US–Canada treaty provides an election to align the two systems, and asset-by-asset decisions (sell before the move, elect, or hold) should be made deliberately. This is the single most valuable piece of pre-move work for anyone with appreciated investments.

3. Deal with the accounts Canada loves and the IRS doesn’t

  • TFSA and FHSA: lose their tax-free character entirely for a US resident, and the funds inside them typically become PFIC problems. Most movers collapse or restructure these accounts before the move.
  • RESP: consider transferring subscriber-ship to a family member staying in Canada, or winding it up, before becoming a US person.
  • RRSP: can usually stay — the treaty protects its deferral. But review investment holdings and confirm your US state’s treatment; not every state follows the federal deferral.
  • Canadian mutual funds in taxable accounts: usually PFICs in US hands. Switching to US-listed equivalents before residency avoids the issue with no US tax consequence.

4. Review any Canadian corporation before you cross

A Canadian-controlled private corporation owned by a soon-to-be US resident raises some of the heaviest machinery in US tax: Form 5471, the CFC anti-deferral rules taxing corporate earnings to the owner personally, and the loss of Canada’s small-business deferral advantage. Options — paying out retained earnings before the move, reorganising, or electing a different US classification for the entity — are all dramatically better exercised pre-move. If you own a company, this analysis belongs at the top of the checklist.

5. Think about estates and gifts early

US transfer taxes operate completely differently from Canada’s deemed-disposition-at-death system, and exposure begins with US residency (and for some purposes, with US assets alone). Large planned gifts — to children, to spouses, into trusts — are often far simpler executed before the move. Existing Canadian family trusts need a US review before a beneficiary or trustee becomes a US person, not after.

6. The first year: two countries, two part-year stories

The transition year typically involves a part-year Canadian return with a departure date, a first US return (possibly dual-status), treaty positions, and the start of FBAR and other US information reporting. Getting the two returns to tell one consistent story — same dates, coordinated income allocation, credits in the right country — is the difference between a clean transition and years of correspondence.

When to get advice

Six months before the move is comfortable; a year is better if a corporation or large unrealised gains are involved. Even two weeks helps. The pattern we see repeatedly: the cost of pre-move advice is a small fraction of the cost of unwinding just one missed item afterwards.