US dividend withholding tax calculator
US dividends paid to Canadians lose 15 percent to withholding tax, unless they sit in the right account. See what you lose, what you can recover, and why an RRSP is the most efficient home for US dividend stocks.
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1.The rule. Under the Canada and United States tax treaty, US dividends paid to Canadians face a 15 percent withholding tax. Held directly in an RRSP, RRIF, LIRA, or LIF, the dividends are exempt and nothing is withheld. In a TFSA, FHSA, RESP, or non-registered account, the 15 percent applies.
2.Recoverable or not. In a non-registered account the 15 percent can generally be claimed back as a foreign tax credit on your Canadian return, so the net cost is often near zero. In a TFSA, FHSA, or RESP there is no offsetting Canadian tax, so no credit is available and the 15 percent is a permanent cost.
3.Direct holdings only. The RRSP exemption applies to US securities held directly, such as US stocks or US-listed ETFs that hold US stocks. A Canadian-listed ETF that holds US stocks does not get the exemption even inside an RRSP, and dividends from American Depositary Receipts are withheld in any account.
4.Scope. Covers US-source dividends on US holdings. It does not cover non-US foreign withholding, partnership distributions, or real estate trust specifics, which can differ. Educational only, not tax advice. See disclosures.