Financial checklist for moving to the US for work
If you’re moving from Canada to the US for work, there are a few things that are helpful to do before and immediately after moving that will make your short-term finances much, much easier, and I’ve put together a few of them based on conversations I had with a friend who relocated around a year after I did.
At the end is a checklist you can skip to for a quick overview.
Closing your TFSA and simplifying Canadian investments
The US Internal Revenue Service (IRS) does not recognize Canada’s Tax Free Savings Account (TFSA) as a retirement account, so all transactions are taxed for normal investment and interest income.
Figuring out how to report TFSA income to the IRS is a major pain, so many accountants recommend simply closing your TFSA before you move to the US. All gains in the TFSA will be taxed when you move to the US regardless of whether you keep it open or not, and the reporting requirements aren’t worth it.
As per the Canadian Revenue Agency (CRA) website, TFSA contribution room only accumulates during years you are a resident of Canada, so you won’t gain contribution room while you’re living in the US. As per the CRA, withdrawals are added to your TFSA contribution room at the beginning of the following year, so you’ll be able to open a new TFSA and recontribute everything you took out when you return to Canada.
The US does recognize Canada’s Registered Retirement Savings Plan (RRSP) under a US-Canada tax treaty, so while you won’t be able to make any new contributions once you move to the US, you can keep any RRSP accounts open without tax consequences (ask your bank about any reporting requirements).
It’s very difficult to open new bank and investment accounts in Canada once you’ve moved to the US and are no longer a Canadian resident, so I’d suggest making any account changes before moving.
For example, a year after moving, I really wished that I’d moved my investments to lower-cost providers. I transferred my taxable investments to low-cost index funds in my US Vanguard account without issues, but the RRSP was more difficult, since most banks won’t open new accounts for non-residents. I eventually managed to transfer the RRSP funds from RBC to Questrade, but it took several weeks and multiple phone calls to complete, while it could have taken just a couple of days if I’d made the changes before I’d moved.
Note that I am not a financial professional, and you should talk to someone who is, and who is also familiar with cross-border issues before making major financial decisions.
Applying for a Social Security Number
A Social Security Number (SSN) is required for opening most financial accounts, applying for a driver’s license, reporting income for taxes, and applying for most credit cards and loans.
Once you’ve received your work authorization and have moved to the US, you can apply for a SSN. Canadians with TN-1 work visas will have an I-94 as their authorization record, which can be downloaded from https://i94.cbp.dhs.gov/I94/. You’ll need to provide a US address when applying for a SSN, so it’s simplest if you secure a rental before you go in.
You’ll need to bring your work authorization permit and passport with you. You can print out the application form at https://www.ssa.gov/forms/ss-5.pdf and fill it out before going in to save time, or pick up a form to fill out when you get there. Some offices take appointments, which is worth checking out since that could trim a hour or so off of your visit.
You can apply for a SSN as soon as you move to the US, and get a print-out with the number the same day, while the physical card can take two weeks to be mailed out.
Setting up a US bank account and credit card
It’s surprisingly difficult to open a US bank account when you move to the US, and many banks require a SSN and proof of US residency.
You’ll also find that your Canadian credit history doesn’t cross over to the US, so you’ll be treated as if you have no credit history whatsoever and may find it difficult to obtain a credit card from most banks and credit unions.
You’re not completely out of luck though.
You may not have a SSN for the first couple of weeks after moving to the US, but depending on the company you’ll be working for, there may be partner banks and credit unions that have relocation programs and that can open accounts based on work authorization documents and other identification papers.
For example, Bank of America’s downtown Seattle branch has a relocation program for several local companies including Amazon and Starbucks, and they were the only local institution that was able to set up a bank account and credit card for me, using my passport, work visa, signed employment offer letter, and an initial cash deposit. I also tried Chase and Wells Fargo, but they both turned me down because I didn’t have a SSN yet. I’ve heard from coworkers that First Tech Federal Credit Union provides a similar relocation program, while they may also require a SSN before opening an account.
Another option for credit cards may be available if your current bank or credit card provider has a US presence. If you bank with RBC, RBC Bank US can offer you a US credit card based on your Canadian credit history, and American Express has a “Global Card Transfer” program.
It’s convenient to get financial accounts out of the way before you start your job, since most US banks have less customer-friendly business hours than Canadian banks (likely to open after you start work and close before you leave, and only be open for few hours on Saturdays and not at all on Sundays).
I was able to visit the city a few months ahead of my job’s start date, and used the time to visit several apartments and shared houses I’d scheduled visits with, sign a rental agreement with a landlord who was willing to hold my place for after his current tenant moved out, and set up bank and credit card accounts. That short trip made life a lot easier when I moved and started my new job.
Getting a US driver’s license or other state ID
You’ll need some form of US state ID at some point, and the most common form is a driver’s license.
If you have a driver’s license from BC, you can transfer it to a Washington driver’s license without taking a test since the driving laws are so similar, if you transfer your license within 30 days of moving to Washington. After 30 days, you need to take the test like anyone who is starting without a driver’s license.
To get a Washington driver’s license, you’ll need to bring proof of identify such as your non-Washington driver’s license, your SSN (yes, that again), proof of residency such as a bank statement that includes your US address, and payment for the license. Check your state’s department of licensing website for the latest requirements.
The waiting lines at licensing offices are notoriously slow, so make sure you have enough time set aside on that day as well as all of the prerequisites checked off. You can pre-fill your application at https://www.dol.wa.gov to speed up the process.
The first time I went, I spent a couple of hours in line only to find out that I wouldn’t be able to transfer the license because I hadn’t received my SSN yet. There is a way to start the license transfer without it, but it’s a more complicated process that takes longer than just waiting for the SSN.
Learn from my mistakes. Get the SSN first.
Before you leave Canada:
- Close your TFSA and make any changes that require opening new Canadian accounts.
- Verify with your current financial institutions that they will be able to provide you with service as a non-resident (some will not) and that they will be able to provide the tax documents required by the IRS after you move.
- Look up rentals to get a sense of neighbourhoods and prices.
- Put together a list of rentals to check out and schedule meetings with landlords so you can do them all in one go.
- Put together a list of must-haves and questions to ask potential landlords.
- Open a US bank account and credit card account before starting work if possible.
- Collect passport, birth certificate (needed for some financial institutions), and any prescriptions (medical, glasses, etc).
- Purchase travel health care insurance to cover the period of time between moving and starting with the company’s health care plan.
Once you’ve moved to the US:
- Apply for a SSN.
- Purchase a US phone plan and SIM card.
- Purchase renter’s insurance.
- Cancel Canadian health insurance.
- Update Canadian financial institutions with your US address and request that they provide US tax documents going forward.
- Update the CRA with your US address.
Once you have an SSN:
- Apply for a local driver’s license or state ID.
- Provide SSN to US financial institutions that you were able to open accounts with previously.
- Open any remaining financial accounts.