The Canadian Who Moved to the US Permanently

By Bryant Andrus

Profile: The Canadian Who Moved to the US Permanently

TL;DR

The House released the ‘One Big Beautiful Bill’ on May 12, and it would make the higher US estate tax exemption permanent, easing the year-end gifting rush.
A higher exemption doesn’t fix structure: a non-citizen spouse still needs a QDOT, and RRSPs, Canadian private company shares and Canadian real estate remain in the worldwide US estate.
The proposed SALT cap of $40,000 helps high-tax-state residents, while every RRSP still needs to be properly reported on your FBAR and, above the thresholds, Form 8938.

If you’re a Canadian who made the move to the United States — whether last year or a decade ago — and you’ve been watching the US tax legislation debate with one eye while managing your Canadian accounts with the other, May 2025 brought news that directly affects your financial plan on both sides.

On May 12, the House Ways and Means Committee released its tax text of the ‘One Big Beautiful Bill,’ and the full House passed the bill on May 22. The bill is moving — and while the Senate will revise it before it’s law, the direction is clear enough to act on now.

The Estate Tax Sunset Is Probably Off the Table

Since 2018, you’ve been planning with a doubled estate tax exemption — roughly $13.99 million per person in 2025. That exemption was scheduled to be cut in half on January 1, 2026. The bill would prevent that sunset, raising the exemption to $15 million in 2026 and making it permanent. If you’ve been racing to fund trusts or make large gifts before year-end, the urgency has eased. But the planning itself hasn’t disappeared — it’s just less time-pressured.

Here’s what hasn’t changed: if your spouse is not yet a US citizen, the marital deduction still doesn’t apply without a QDOT (the treaty marital credit is a partial alternative). And your RRSP, shares of your Canadian private company, and Canadian real estate are all still part of your worldwide estate for US purposes. The higher exemption gives you more room — it doesn’t solve the structure problem.

SALT: A Real Benefit If You’re in the Right State

The House-passed bill raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 for filers with income under $500,000. If you’re paying significant state income tax — Arizona is lower, but California, New York, and New Jersey residents pay substantial amounts — this could reduce your federal tax bill meaningfully. For California residents in particular: California does not recognize the Canada-US Tax Convention, so any additional federal deduction is one of the few tools available to offset your overall tax burden there.

Your RRSP Is Still a US Filing Obligation

While US tax legislation is changing around it, your RRSP hasn’t changed. The treaty deferral is now automatic (Form 8891 was retired in 2014), but every RRSP account must still be reported on your FBAR and, above the thresholds, Form 8938. If you have any doubt about whether these accounts were properly reported, now is the time to check — because missed FBAR or Form 8938 filings are far easier to fix before the IRS raises them.

Ready to Talk?

Cross-border planning is time-sensitive and highly fact-specific. If any of the topics in this issue apply to your situation, we would welcome the conversation. State Bird Corp specializes in US–Canada cross-border tax, estate, and immigration planning for families and businesses on both sides of the border. Our team works with clients across the US and Canada — wherever your cross-border life takes you.

Sources

Sincerely,

The State Bird Corp Team

State Bird Corp

P: (602) 641-5996 · E: Info@statebirdcorp.com · W: statebirdcorp.com

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State Bird Corp is a management and financial consulting firm. State Bird Corp is not an accounting, legal or investment advisory firm. Cross-border planning is highly fact-specific. The strategies and topics described are general in nature, and readers should consult qualified specialists before taking any action. Any recommendation, inferences, or other guidance contained herein is meant for educational or general purposes and should not be relayed upon as specific advice for any person or business. Consult your legal, tax, and investment advisor for specific recommendation to your situation.