Taxes on U.S. Stocks for Canadians
How Canada taxes U.S. stocks: 15% dividend withholding by account, currency on every trade, T1135, and U.S. estate tax in brief.
The short version
- Canada taxes your gains on U.S. stocks like any other: half the gain is taxable, calculated in Canadian dollars at the exchange rates on the buy and sell dates. The U.S. generally doesn't tax a Canadian's gains on U.S. stocks.
- U.S. dividends are fully taxable in Canada (no dividend tax credit). The U.S. withholds 15% with a W-8BEN on file, which you claim back as a foreign tax credit in a non-registered account.
- In an RRSP or RRIF, U.S.-listed stocks and ETFs pay dividends with no U.S. withholding under the treaty. In a TFSA or RESP, the 15% is withheld and lost.
- U.S. property costing more than $100,000 in total, even at a Canadian broker, means filing form T1135 every year.
- Large U.S. holdings can also create U.S. estate tax filing at death. Canadian-listed ETFs that hold U.S. stocks avoid most of this paperwork.
Taxes on U.S. Stocks for Canadians
Canadians love U.S. stocks for good reasons: bigger companies, more choice, and returns that have made a GIC look like a nap. The tax rules are friendlier than people fear, with three traps: the 15% withholding in the wrong account, the currency conversion on every trade, and paperwork that kicks in quietly at $100,000. Here's how to get them right.
Which Account Is Best for U.S. Stocks
| Account | U.S. dividend withholding | Can you recover it? | Gains |
|---|---|---|---|
| RRSP, RRIF, LIRA | 0% on U.S.-listed holdings (treaty) | Nothing to recover | Tax-deferred |
| Non-registered | 15% with W-8BEN | Yes, foreign tax credit | Half taxable when sold |
| TFSA | 15% | No, lost | Tax-free |
| RESP, FHSA | 15% | No, lost | Sheltered |
Canadian-listed ETFs that hold U.S. stocks lose 15% at the fund level in every account, including the RRSP, so for big RRSP holdings, U.S.-listed ETFs can be more efficient. In a TFSA, the difference is small for growth stocks that pay little dividend. See TFSA and RRSP.
Where should your U.S. holdings sit?
Tell the assistant what you hold, in which accounts, the dividend yields and your province. It shows the withholding you lose each year and a better arrangement.
Currency: Every Trade Has Two Prices
Example: you buy 100 shares at US$50 when US$1 = C$1.30 (cost C$6,500) and sell at US$60 when US$1 = C$1.40 (proceeds C$8,400). Your gain is C$1,900, not US$1,000 converted at the end. Part of it is currency. Use the Bank of Canada rate for each trade date, average your cost across purchases, and track it in the adjusted cost base calculator. The rules are on adjusted cost base explained.
Paperwork Checklist
- W-8BEN on file with your broker, or the U.S. withholds 30% instead of 15%.
- T5 or broker slips for U.S. dividends; report the gross amount and claim the foreign tax.
- Form T1135 once U.S. and other foreign property cost more than $100,000; see form T1135.
- Schedule 3 for gains, in Canadian dollars; see capital gains tax.
- Losses follow the 30-day rule; see capital losses.
U.S. Estate Tax, Briefly
When a Canadian dies owning U.S. stocks (or U.S. real estate), the U.S. can claim estate tax on those assets. In practice, the Canada-U.S. treaty gives a credit based on the U.S. exemption, so most Canadians with modest estates owe nothing, but U.S. assets over US$60,000 can still mean a U.S. estate filing. Canadian-listed ETFs avoid it. This is a U.S. tax matter; we explain the Canadian side and suggest cross-border advice for larger holdings. More on stock investment taxes.
U.S. Stock Tax Questions
Do Canadians pay U.S. tax on U.S. stock gains?
Generally no. A Canadian resident’s capital gains on U.S. stocks are taxed in Canada, not the U.S. U.S. dividends have U.S. tax withheld at source.
How much U.S. withholding tax is there on dividends for Canadians?
15% with a W-8BEN on file, in non-registered accounts, TFSAs and RESPs. U.S.-listed holdings in an RRSP or RRIF are generally exempt under the tax treaty.
Can I recover U.S. withholding tax in my TFSA?
No. Because TFSA income is not reported on your Canadian return, there is no foreign tax credit to claim, and the 15% is lost.
How do I calculate gains on U.S. stocks in Canadian dollars?
Convert the cost of each purchase at the exchange rate on the purchase date and the proceeds at the rate on the sale date. The difference is your capital gain, including any currency gain.
Do I need to file a T1135 for U.S. stocks?
Yes, if the total cost of your U.S. and other foreign property held outside registered accounts was more than $100,000 at any time in the year, even if held at a Canadian broker.
Sources: CRA, Line 40500, federal foreign tax credit; Questions and answers about Form T1135. Checked October 2026. The RRSP withholding exemption and U.S. estate tax rules come from the Canada-U.S. tax treaty and U.S. law; we summarize them only. Withholding treatment of ETFs inside registered accounts depends on the fund structure.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.