If the Canadian citizen is a non-resident when they make their withdrawal, the withdrawal will be subject to 30% U.S. withholding tax. For Canadian tax purpose, the Canadian citizen must include this withdrawal as income for Canadian tax purposes, the withholding tax can be used as foreign tax credit. Depending on the taxpayer’s income the tax paid to US may not be fully recovered in Canada. In extreme situation, the full amount may be un-recoverable. Caution should be taken when implementing this approach.