Canada and the U.S. generally do not allow taxpayers to deduct contributions made to a retirement plan in the other country from their taxable income. There are, however, three exceptions.
These three exceptions became effective in 2009 as part of the Fifth Protocol of the Canada-U.S. Tax Treaty. The changes benefit three categories of people:
workers on short-term cross-border assignments;
cross-border commuters; and
U.S. citizens living and working in Canada.