US Stocks in a TFSA or RRSP: Withholding Tax Explained, With a Calculator
$50,000 at a 0.84% dividend yield pays about $420.00 a year in a TFSA.
- RRSP$63.00$63.00 withheld (15%) and not recoverable.
- TFSA$63.00$63.00 withheld (15%) and not recoverable.
- RESP or FHSA$63.00$63.00 withheld (15%) and not recoverable.
- Non-registered account$0.00$63.00 withheld, usually recovered as a foreign tax credit on your return.
Canadian-listed ETFs that hold US stocks directly (such as VFV, XUS or ZSP) have the 15% taken inside the fund, so no account type avoids it, but you skip currency conversion.
Turn on JavaScript to change the numbers. The figures shown are for $50,000 at a 0.84% yield in a TFSA.
The short answer
The US withholds 15% of the dividends paid on US stocks to Canadian residents who file a W-8BEN. In an RRSP or RRIF, US-listed stocks and ETFs are exempt under the Canada-US tax treaty. In a TFSA or RESP the 15% is lost. In a non-registered account it is withheld but you can usually claim it back as a foreign tax credit. Canadian-listed ETFs that hold US stocks, like VFV, lose the 15% inside the fund in every account type.
This is step 6 of six in our investing path. On a 0.84% yield, the 15% works out to about 0.13% of your holding a year: a real cost, but a small one.
Where the 15% is lost
| Holding | RRSP or RRIF | TFSA or RESP | Non-registered |
|---|---|---|---|
| US-listed ETF or stock (VOO, VTI) | Exempt | 15% lost | 15% withheld, usually recoverable |
| Canadian ETF holding US stocks (VFV, XUS, ZSP) | 15% lost in the fund | 15% lost in the fund | 15% withheld, usually recoverable |
| Canadian ETF holding a US ETF (XUU, VUN) | 15% lost in the fund | 15% lost in the fund | 15% withheld, usually recoverable |
From the treaty, broker explainers and Canadian Couch Potato, listed under sources. We found no source saying an FHSA is exempt, so the calculator treats it like a TFSA.
Why the RRSP is different
The Canada-US tax treaty exempts dividend and interest income of a trust operated to provide pension or retirement benefits. RRSPs and RRIFs qualify; TFSAs, RESPs and RDSPs do not. The exemption applies only when the RRSP holds the US security directly. When a Canadian ETF holds the US stocks, the fund is the one receiving the dividends, the tax is taken at the fund level, and Questrade notes it cannot be recovered through Canadian tax credits.
Is it worth buying US-listed ETFs to avoid it?
Only in an RRSP, and only if the currency cost is small. On $50,000 at a 0.84% yield, the withholding in an RRSP through VFV is about $63 a year. Converting $50,000 to US dollars at 1.5% costs $750, and converting back later costs about the same again, so it would take years to come out ahead. Norbert’s gambit cuts the conversion to about $9.95 plus small trading costs at brokerages that support it, which changes the answer for larger RRSPs. See brokerage currency costs.
In a TFSA, it does not matter much how you hold US stocks
Because the 15% is lost in a TFSA either way, a Canadian-listed ETF is usually the better choice there: no currency conversion, and the dividend withholding is the same. The same applies to RESPs.
In a non-registered account
US tax withheld on dividends you receive in a taxable account can usually be claimed as a foreign tax credit on your Canadian return (line 40500), which offsets Canadian tax on the same income. Canadian ETFs report the foreign tax paid on your T3 slip so you can claim it.
File a W-8BEN
Without a W-8BEN on file with your brokerage, the US withholding rate is 30%, not 15%. Wealthsimple’s help centre says filing it lets them reduce the non-resident tax for Canadian residents generally from 30% to 15%. Most brokerages ask for it when you open the account.
How the calculator works
Yearly dividends = amount x yield. Withheld = dividends x 15%, except US-listed holdings in an RRSP (0%). Lost = withheld, except in a non-registered account, where we assume you recover it through the foreign tax credit. It does not model all-in-one ETFs, where withholding applies to both US and international dividends at different levels.
Frequently asked questions
Do I pay US withholding tax on US stocks in a TFSA?
Yes. US dividends paid into a TFSA generally have 15% withheld, and it cannot be recovered because the TFSA is not covered by the treaty exemption for retirement plans.
Are US dividends in an RRSP taxed?
Not if the RRSP holds US-listed stocks or ETFs directly: the Canada-US tax treaty exempts retirement trusts such as RRSPs and RRIFs. A Canadian-listed ETF holding US stocks still loses 15% inside the fund.
Should I buy VFV or VOO?
In a TFSA, VFV usually makes more sense: the 15% is lost either way and VFV avoids currency conversion. In a large RRSP, US-listed ETFs like VOO avoid the withholding, but only pay off if you convert currency cheaply, for example with Norbert’s gambit.
What is a W-8BEN?
A US tax form that certifies you are a Canadian resident, which lowers US withholding on dividends from 30% to the 15% treaty rate. Your brokerage asks for it when you trade US securities.
- Questrade: RRSP foreign withholding tax, updated March 12, 2026; Questrade: US stocks in a TFSA, updated February 18, 2026; Wealthsimple Help: US withholding tax and W-8BEN; RBC Wealth Management: Tax implications of investing in the United States, June 2016; Canadian Couch Potato: Foreign withholding taxes revisited, July 11, 2016; Canada-United States Tax Convention Act, 1984; CRA: Line 40500 federal foreign tax credit, modified August 14, 2026; Vanguard: VFV yield, September 30, 2026. Checked October 30, 2026.
- Method: formulas shown above; results checked against a separate implementation.
General information, not investment, tax or legal advice. Fees and rules change; confirm with the provider and the official sources above before you act. Gizly is not affiliated with any provider named here and has no affiliate links on this page. See how we check the numbers and our disclosure.