Canadian marrying an American - Bordertown Question

Tricky situation which I don't think has been addressed

First of all I am in my last year of study in the U.S. on an I-20 student visa, I am aware that when I am done school I can apply for a CPT for a year of work within the states. Since my career is not on the approved list for obtaining a work visa (I can't remember the name of the specific visa) I would go into the 'lottery' to obtain one. My boyfriend is american and in the same field as I am.

I plan on living in the U.S. but on a border town, working in Canada AND part-time in the U.S (my ideal situation). If I were to get a spousal visa would this situation work? I know there are limitations on entering Canada once you apply for it.

The situation and seemingly endless questions I have are driving me nuts and finding a place to have these questions addressed have so far been unsuccessful. I have a very promising job waiting for me if I decide to return to Canada to work otherwise I would just pack up and live & work in the U.S. for good =) Also there is a job for my boyfriend on the opposite side of the border, two jobs in the same field that close together are very hard to come by

Sure this has been covered lots before on this site. Get married, stay in the US and apply for adjustment of status.

See http://www.visajourney.com for ALL the information you will need.

Working in Canada and living in the US in this situation are going to be very complex, at least initially and I wouldn't bother trying frankly. Once you complete the process and become an LPR it becomes slightly easier except that you may end up in a situation where you never qualify for US citizenship because of the time you spend in Canada.

However the main reason not to do it is the tax situation. Because you're an LPR of the US and married to a US citizen who lives there, by definition your principal residence and tax home are in the US, however because you work in Canada you have to pay Canadian payroll taxes for that job and claim a US foreign tax credit, which will be less than the tax you pay in Canada (because US taxes are usually lower).

So in essence you are paying Canadian taxes but cannot receive any of the benefits like EI or healthcare because you are not resident in Canada.

Thanks for the quick replies! I love this site!

I figured the tax situation would be tricky, but I would be self-employed possibly (more than likely) owning my own business. Most of the money I will be making in Canada will be staying there to pay off my (enormous) student loans at least for the first few years.

The majority of my time would be spent in the U.S. I would simply be commuting 3 to 4 days a week

As far as tax systems I was hoping that the tax systems are separate, I would file a canadian tax claim and an american tax claim and never the two shall meet =)

There's no way of keeping them separate unless you want to pay taxes twice. If you become self-employed then it will be even more complex.

A permanent resident of the US is exactly that, which means you MUST declare ALL your income from wherever it is on your 1040 return (and moreover, declare your foreign assets on the FinCEN FBAR form). You don't have to be registered as self-employed in the US necessarily but in Canada you do and you have to do all that paperwork. Once you've paid yourself in Canada and filed a T1 you then have to convert it into USD and put it down on your 1040 as well and claim a foreign tax credit on Form 1116.

Under the totalization agreement your CPP counts as a social security contribution so I don't think you have to pay FICA as well but you'll need to talk to the SSA about that.

Like I said above, essentially because you work in Canada but your principal residence is in the US, you pay almost the same taxes as a resident (slightly less because on your TD-1 you say you're non-resident and under that payroll code the withholding is a teeny bit lower), you claim a foreign tax credit in the US to eliminate the US taxes but effectively you are paying Canadian taxes in that situation and receiving none of the benefits. Although if you're self-employed you're exempt from EI anyway, so in reality what it means is that you can't use Canadian healthcare.

The CRA really doesn't like Canadian citizens saying they're non-resident when they still work in Canada btw, you need to be careful not to have residential ties to Canada.