Canadian citizen working remotely in US for Canadian company

My wife and I are both Canadian citizens and are both moving to the US for her job. She has been transferred to a US office by her company for a temporary assignment (7-10 months) and has received a TN visa. I work for a Canadian company as an engineer and have made arrangements with my boss to work remotely, either under my current employee status or as a contractor hired by the company. I will continue to do the same work for my Canadian company and will continue to be paid in Canadian dollars to my Canadian bank account; the only difference is that I will be sitting in the US when doing the work.

I understand from reading the posts that I will still need to obtain a US work permit to work remotely but my question is, which one do I qualify for and will I be required to pay US taxes?

From my reading, a TN Visa sponsored by my company (or hired company if I chose to work for them as a contractor) seems to be my best option, but I am not sure if I qualify as a TN Visa requires that you have a job offer from a US employer. My company does have offices in the US but not in the city we are moving to and the work I will be doing is for the Canadian office. If I do not qualify for a TN visa does anyone know what type of work permit I should apply for?

I am also wondering if I will I be required to file taxes in the US. My wife’s company has determined that we will continue to be Canadian residences for tax purposes since this is only a short assignment. On the IRS website is states that you are required to file US taxes if you have a US source of income; does anyone know if physically working in the US qualifies as a US source of income even when working remotely for a Canadian company and being paid Canadian dollars to a Canadian account? Will I be required to file any forms with the IRS even if I am not required to pay US taxes?

Thank you for your help.

Under the tax treaty if you are in the US for more than 90 days or earn more than $10,000 you have to file a tax return in the US. It's actually more complex than that, the employer must also do payroll withholding and issue you a W-2 etc., i.e. they must act as a US employer. You can't just be paid in Canada and pretend you live there. I'm guessing the simplest idea would be to move you to the US payroll of the US office, but you would need an SSN to be able to do that.

This CRA publication gives you a brief overview of how to file taxes as a non-resident: http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html IRS publication 519 explains in more detail, IRS publication 515 explains the employer's responsibilites.

The immigration issue is more complicated, you can't work on TD and you would be working in the US. TN-1 as an engineer sponsored by the US branch of the company you work for seems the most sensible.

I get the impression they're wising up about remote workers using VPNs etc. because I got a serious grilling about it the last time I went through. They wanted to know names, how much time I spent in the office in Canada, etc. I shut them up by showing them my return ticket.

Thank you for your quick response.

My current employer does not want to go through the process of putting me on their US payroll, so I am wondering about the legalities of setting up a Canadian contracting company and hiring myself back to my current employer to do contract work for the Canadian office.

Working as a contractor for my current employer, will I still be able to have them sponsor my TN visa application? Is their sponsorship required to come through their US office even though I will working for the Canadian branch? If yes, does that mean that my contracting company would have to be on my current employers US payroll?

If I have my current employer pay my Canadian contracting company in Canadian dollars to a Canadian account for my work and I only pay myself a marginal salary (less than $10,000 (to my Canadian account)) would I be able to avoid filing taxes in the US according to the tax treaty?

Thanks again for all your help.

Taxes have to paid proportionally based on where you are, so if you have a Canadian company and work for it in the US, it has to register with the IRS, get an EIN and do US payroll withholding. It's not something you can artificially manipulate and in any event it kicks in if you are in the US for more than 90 days or earn more than $10,000, so if you're there for ten months it's not a solution.

TN-1 can be gotten by subcontractors but it's more tricky and it has to be arm's length, so essentially you would go through all that, creating a company, registering it in two countries, etc. just so that you could be a subcontractor to the US office rather than being on their payroll. From an immigration standpoint it doesn't really help, in fact it makes it more complicated because TN-1 is simpler with direct employees.

I think your best idea would be to plead with your employer to do it all through their US office because it's by far the simplest way.

I have to say this is the whole reason basically that companies have registered US entities if they're based in Canada, because of the tax and immigration problems. There's no easy way around it, especially for such a short period of time, by the time you got an E visa for example it would be time to come home.

Oops, made a mistake here, it's actually 183 days or $10,000 according to the tax treaty, not 90 days.

Not sure if that really helps though as it's still less than seven months.

Hello All!

I am in a very similar situation and I am wondering if a TN Visa will be okay? No one has really answered which visa would be required for working remotely in the US.

However, I might be able to "spin" my situation differently because I work for a large international company whose headquarters are in the US. So I currently work for the Canadian subsidiary but I want to work remotely from one of the US offices (as my husband has a temp placement there). I will continue to be on the Canadian payroll with my salary continuing to go into my Canadian bank account.

Do I qualify for a TN Visa since the parent company is based in the US? I don't exactly have a US job offer though. I will just be doing my same Canadian job but sitting in a US office.

Thanks in advance for any info you may have for me!
Sharon

It hasn't been answered because basically there isn't an answer. USCIS hasn't kept up with technology in that respect. Technically, it is illegal to work while you're in the US if you do not have US work authorization. Regardless of who you're working for. The thing with working remotely is that how are they going to enforce it really, except at POE when they ask you what do you plan to do while you're here.

You could also ask your company to do an L1B visa. It is intracompany transfer, and will allow you to go back and forth, or stay in the US legally to work. Whether or not you qualify for TN depends on your qualifications. Do you have a university degree and work experience? L1B may be tricky as well, if you have only worked for the company a short time. You don't need a degree for L visa, however you do have to prove "specific knowledge" of either the company's product, or the company specificially.

I will continue to be on the Canadian payroll with my salary continuing to go into my Canadian bank account.

I'm afraid it's probably not legal to do it that way because you're doing the work in the US, so you have to be on the US payroll, that's the law. The exemption is that if you are directly employed by a Canadian employer and you work in the US for less than 183 days a year AND earn less than CDN$10,000 during the year you are exempt from doing US payroll.

In addition to get L-1 status to begin with you've got to be sponsored by the US office, so if you're doing that for immigration purposes it implies the pay is coming via a "permanent establishment" in the US which means the exemption doesn't apply. L-1 usually requires some sort of management role because either you have to be a manager or be using "specialized knowledge" although I suppose you could be in the US and be applying your specialized knowledge over the internet to the Canadian office, you'd have to check the regs for that one because it's a bit unusual.

If your husband is working in the US on L-1 the way to do it is to go in as his wife on L-2. L-2 spouses can get work authorization, apply on I-765, it's that simple. Once you've got work authorization you can do any job you like in the US. However if he's on TN-1 or H-1B then unfortunately the derivative of those categories has no work authorization available. Maybe he can change status to L-1.

Thanks for the quick replies Reba

-- Tue Mar 03, 2009 11:09 pm --

Darn... My reply got cut-off because I used "Quick Reply" instead of "Post Reply". I don't have the heart to type it again...

Thanks for the info Steven and Reba!