Canadian employee performing work for US parent

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cynixincNew Member
Topic author
Posts: 2
Joined: 4 Jul 2009

Canadian employee performing work for US parent

Post Sat Jul 04, 2009 12:25 pm

I hope this hasn't been answered previously - I couldn't find this exact situation described in another post:

I have been hired as a full time employee for a Canadian based corporation, that is wholly (or majority) owned by a US corporation. These two companies are tightly integrated (same email system, shared HR services...) I have been asked to fly down to the parent company's office in the US to perform work with the employees down there in the finance department since they need help and the work I do is specialized. I would fly down once every couple of weeks for a few days and then return to Canada each weekend. I will be paid on salary by the Canadian corporation.

My job+education qualifies me for a TN visa and will be applying for that as requested by my employer.

Questions:

1) Does the portion of my CAD salary 'earned' working in the US for the parent company require me to file a non-resident US income tax form even though I don't directly earn income in the US or get paid by a US entity?

2) If answer to above is 'Yes' should my CAD employer, or the US parent, be withholding US tax...they are not going to do that, and are only remitting CAD tax from my CAD salary.

Thanks for any guidance.
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StevenCanuckAbroad VIP
Posts: 3635
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Joined: 28 Sep 2007
Location: Calgary

Re: Canadian employee performing work for US parent

Post Sat Jul 04, 2009 4:29 pm

Depends on how much you earn while in the US, if it's less than $10,000 a year then they don't have to do anything. If it's over that you have to be on the US payroll when you're down there, fill in a W-4, get a W-2 every year and file a 1040NR and an 8840. Then you file for a foreign tax credit with your T1 as explained in the general guide for the T1.

I wouldn't bother with TN-1, clearly the category you need is L-1 intermittent because you're there less than 183 days a year and it's clearly an intracompany situation. All you need for L-1 is "specialized knowledge" which means bespoke knowledge about how that company works.
Steve.
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RebaModerator
Posts: 2561
Joined: 16 Jul 2004
Location: North Carolina

Re: Canadian employee performing work for US parent

Post Sun Jul 05, 2009 6:13 am

Yeah, go with the L1, sounds like the better option.

Plus, if you're still being paid by the Canadian sub, you don't have to do US taxes.
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StevenCanuckAbroad VIP
Posts: 3635
Topics: 2
Joined: 28 Sep 2007
Location: Calgary

Re: Canadian employee performing work for US parent

Post Mon Jul 06, 2009 9:31 am

Yes you do, if you're earning over $10,000 pa. And so do they.
Steve.
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cynixincNew Member
Topic author
Posts: 2
Joined: 4 Jul 2009

Re: Canadian employee performing work for US parent

Post Mon Jul 06, 2009 10:08 am

Thanks - sounds like I need to mention this to my company's HR department so they make sure to take care of their side of the tax filings.
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StevenCanuckAbroad VIP
Posts: 3635
Topics: 2
Joined: 28 Sep 2007
Location: Calgary

Re: Canadian employee performing work for US parent

Post Tue Jul 07, 2009 9:27 am

Given that they've got a US payroll and getting your immigration status is straightforward, the only thing really is that you need to get an SSN after you enter and go on the US payroll. HR will have to sort out the split in your pay I guess.
Steve.
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