Dividend of Canadian shares in US retirement account is exempt from Canadian withholding. Rude awakening from Robinhood (possibly relevant to other brokerages):
Thank you for your question. Here’s a summary of your situation:
* You hold 200 shares of Enbridge (ENB) in your Robinhood traditional IRA (account ending 9877).
* The most recent ENB dividend (payable May 31, 2026) shows $21.02 withheld as foreign tax, with a net dividend of $119.12. The payment is still pending.
**Regarding Canadian withholding tax on dividends in IRAs:**
* Canada generally exempts US retirement accounts (like IRAs) from withholding tax on Canadian dividends, per the US-Canada tax treaty.
* However, this exemption is not always automatically applied by all brokers or their custodians. Sometimes, foreign withholding is still deducted due to how shares are held or processed at the clearing/custodian level.
**What you need to know:**
* Robinhood processes dividends as received from its clearing/custodian partners. If foreign tax is withheld, it is typically because the exemption was not recognized at the custodian level.
* Robinhood cannot retroactively reclaim or refund foreign tax withheld on dividends.
* You will not receive a 1099-INT or 1099-DIV for IRA dividends, but the gross and net amounts (including any withholding) will be reflected in your account history.
**Next steps/options:**
* No action is required on your part, but you may wish to consult a tax professional about your specific situation.
* If you want to pursue a refund of Canadian withholding, you would need to work directly with the Canadian tax authority, which is generally not practical for individual investors in US IRAs.
* For future dividends, the withholding may continue unless the custodian updates their process to recognize the IRA exemption.
If you have further questions or need documentation of the withholding for your records, let me know.