The short answer, by account
The table below shows what happens to a US company's dividend in each account, assuming your broker has a W-8BEN on file. Canadian brokers ask for one when you open an account.
| Account | US withholding on a US stock or US-listed ETF | Can you recover it? |
|---|---|---|
| RRSP, RRIF, LIRA, LIF | 0%: exempt under the treaty | Nothing to recover |
| TFSA | 15% | No |
| FHSA | 15% | No |
| RESP | 15% | No |
| Non-registered | 15% | Usually yes: a foreign tax credit on line 40500 of your return |
The RRSP exemption comes from Article XXI of the Canada–US treaty. In a 2008 private letter ruling, the IRS described the RRSP and the RRIF as arrangements covered by Article XXI(2)(a), so dividends and interest they earn are exempt from US tax. The TFSA (2009) and the FHSA (2023) came after that article was written, and neither has been added to it, so the IRS treats them like ordinary taxable accounts. Wealthsimple's help centre, updated September 26, 2026, lists the TFSA, FHSA, RESP and non-registered accounts as subject to the tax, and the RRSP, RRIF, LIRA and LIF as exempt.
US tax withheld on US-listed dividends, by account
Only the RRSP (and RRIF) is exempt under the Canada–US treaty. In a non-registered account the 15% can usually be claimed back as a foreign tax credit; in a TFSA, FHSA or RESP it is simply lost.
| Item | Value |
|---|---|
| RRSP / RRIF | 0% (treaty exemption) |
| Non-registered | 15% (usually creditable) |
| TFSA | 15% (lost) |
| FHSA | 15% (lost) |
| RESP | 15% (lost) |
What 15% costs in dollars
Withholding comes out of the dividend, not the share price, so the drag equals the withholding rate times the yield.
Worked example. You hold $20,000 of a US stock that yields 2%, so it pays $400 a year in dividends.
- In a TFSA or FHSA: $60 is withheld (15% × $400). You receive $340. The $60 is gone, which works out to 0.3% of the holding's value every year.
- In an RRSP: you receive the full $400.
- In a non-registered account: you receive $340, the full $400 is still taxable income in Canada, and the $60 shows up on your T5 (box 16) or T3 (box 34) as foreign tax paid. You claim it through Form T2209 on line 40500. In most cases that offsets Canadian tax dollar for dollar, so you aren't taxed twice.
A growth stock that pays no dividend has no withholding in any account. That's why some investors keep low-yield US growth names in a TFSA and their high-yield US holdings in an RRSP.
Canadian-listed ETFs that hold US stocks: withheld before you ever see it
When a Canadian-listed ETF owns US stocks (an S&P 500 fund on the TSX, for example), the US withholds 15% from the dividends paid to the fund. The fund is a Canadian trust, not your RRSP, so the treaty exemption doesn't reach through it. That 15% is lost in every account type, RRSP included.
The only account where it isn't wasted is a non-registered one. The fund reports the foreign tax on your T3 slip, and you can claim it as a credit just as you would for a stock you hold directly.
| How you hold US stocks | RRSP | TFSA / FHSA / RESP | Non-registered |
|---|---|---|---|
| US stock or US-listed ETF, held directly | 0% | 15% lost | 15%, creditable |
| Canadian-listed ETF holding US stocks directly | 15% lost (inside the fund) | 15% lost (inside the fund) | 15%, creditable via the T3 |
| Canadian-listed ETF holding a US-listed ETF of non-US stocks (a “wrap”) | Two layers: the foreign country's tax plus 15% US, both lost | Two layers, both lost | The US layer is creditable; the first layer is not |
Justin Bender and Dan Bortolotti's paper for PWL Capital, Foreign Withholding Taxes (2nd edition, 2016), walks through these structures in detail. Its central point still holds: in a TFSA or RESP, a US-listed ETF has no withholding advantage over a Canadian-listed one. The only place a US-listed ETF saves withholding is an RRSP.
Before you move anything to save 0.3% a year, check what your broker charges to convert Canadian dollars to US dollars. The conversion spread is paid once, up front, and it can cost more than several years of the withholding you're trying to avoid.
A stock's country decides the rate, not its currency
Withholding follows where the company is based, not the currency of the dividend or the exchange it trades on.
- A Canadian company listed in New York (one that pays its dividend in US dollars, say) is a Canadian payer. Canada doesn't withhold on dividends paid to Canadian residents, so nothing is withheld in any account.
- A non-US company trading as an ADR on a US exchange is taxed by its home country, not by the US, and the RRSP exemption doesn't apply. Wealthsimple notes that ADR dividends are withheld at source even inside an RRSP, RRIF, LIRA or LIF.
- The UK generally doesn't withhold on ordinary company dividends, so a UK ADR typically arrives whole in any account. UK REIT distributions are the exception.
- Switzerland withholds 35% at source. Canada's treaty rate is 15%, and the difference can only be recovered by filing a refund claim with the Swiss tax authority.
A spreadsheet rule like “USD dividend = 15% withheld” gets both of those cases wrong.
How to check what you actually lost
- Non-registered accounts. Your T5 (box 16) and T3 (boxes 33 and 34) show the foreign tax withheld. That's the amount to claim on line 40500 (via Form T2209).
- TFSA, FHSA, RESP. There's no slip, because the account isn't taxed in Canada. The withholding shows up in your broker's activity history as a separate line (often labelled “non-resident tax”) next to each dividend.
- Check your W-8BEN. Without one on file, the US withholds 30% instead of 15%. The form expires every three years. Most brokers prompt you to renew it, and you can usually see its status in your account documents.
Track it across every account
If you hold US stocks in more than one account, the cost is spread across several activity histories. Looniee's Income tab works out withholding for each holding from the company's or fund's country and the type of account it sits in. It also shows, separately, what was lost for good and what you can still claim as a credit. It's on the free plan: import your broker's file (for example from Wealthsimple or Questrade) or type your holdings in. Looniee never asks for a bank login.
Want to check your room first? Use the free TFSA contribution room calculator or the RRSP contribution limit calculator.
