U.S. withholding tax in an RRSP for Canadians + MORE Aug 3rd

I have EPD stock in my RRSP for their dividend payments (about 7%). What a surprise I had—even when in an RRSP—I had to pay about 30% tax on these dividends. EPD is registered in Louisiana. —Wanda

How much is withholding tax on U.S. dividends?

I am going to provide a brief summary of U.S. withholding tax on investments, Wanda, before addressing Enterprise Products Partners (EPD) specifically.

First, U.S. stocks are generally subject to 30% withholding tax on dividends for non-residents. Many countries, including Canada, have tax treaties with the U.S. to ensure a reduced rate of withholding tax. For qualifying Canadian residents, the tax can be reduced to 15%. In a registered retirement savings plan (RRSP), the tax may be reduced to 0%. 

Qualifying to reclaim U.S. withholding tax

In order to qualify, an investor has to fill out this form and provide it to their investment firm: Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)…

While the war in Ukraine has largely displaced COVID-19 as front-page news, that doesn’t mean the pandemic is done with us quite yet. In fact, COVID again made the front page of the National Post in early July, when it reported that half the Canadian population (more than 17 million) were infected with Omicron in the five months starting in December 2021; and again on July 23, declaring, “COVID refuses to give us a break”.

Governments have warned that COVID continues to pose a threat, especially for those over 60—an age when many Canadians at least start contemplating retirement. As a result, some older workers who commute to corporate jobs have been reassessing their life plans, pushing employers for more flexibility, if not an early retirement package.

Lockdowns and retirement: Not dissimilar

“COVID-19 has given many people a glimpse into what life may look and feel like as a retiree,” says Aaron Hector, a financial planner with Calgary-based Doherty Bryant Financial Strategists…