Canadian Accidentally Contributes to 401K?

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Hi David,
Love all the information I receive from you.
Strange question for you;  A Canadian citizen, who works overseas, comes
back to Canada (now a resident here), and says he contributed to his 401K
plan, but thinks he should not have, or could not have.  He was a US
resisdent when he started the 401K, and says he does not know if the
company contributed or not.   He has overseas income still.   I am not sure
who the company is.
Is is possible to "accidentally" contribute to a 401K?  What would the
implications be?  Would the company even allow that to happen?
Thanks for your help!
GXXXXXXXX
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david ingram replies
If he was working for the same US company overseas, he likely did contribute to his Comap[ny 401(K) plan.  
It is a common practice.
Fairmont Hotels in canada has Canadian managers working around the world who are not taxable in Canada.  
However, they all are included in the Canadian Company Pension plan which is silly because they willthen be taxable in Canada on the withdrawal of the money which would not have been taxable if paid to them outside the plan and was notused as a deduction.
Hard to make big companies move when it comes to tax deals because they have collective agreements with Unions or they have employee benefit plans which require all employees to participate afte 60 or 90 days or after a certain income level or before a certain age or when they buy a car with four wheels.
I know you are a financial planner.  If you evr get involved with group plans you will see this type of rule every where.
Hope this helps
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 
New email to [email protected]
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