Continue on same TN status while switching from W2 to 1099

Hi,

I'm a Canadian citizen, working in the US with TN status as an engineer, and have my current TN status valid till June 2012.

I'm moving out of the US for good, but want to remotely work for the same US company until my TN expires.

The company has mentioned that it prefers I switch from an employee to a contractor, basically US tax-wise I will switch from W2 to 1099 but of course all for the same company.

Is it possible to just switch from employee to contractor for the same company without the need to inform USCIS, as far as the TN status is valid with the same company?

Do I need a new TN application as a contractor?

Although I am a Canadian Citizen, I am not returning to Canada, and haven't been there since childhood, so anything related to filing taxes in Canada doesn't apply to me.

I highly appreciate any suggestions..

Thanks in advance,

Regards

You do not need a TN while physically outside US, so your TN is worthless. Should you need to re-enter US for work, I woukld simply enter on B1 status (or, more safely, ask for a new TN).

I would suggest -- if you decide that you prefer future entries on TN -- that you get new paperwork to reflect your contract status -- the border may simply neglect these and enter you on B1 anyways, but at least you'll have it.

In any event, you should hand in your I-94 when you leave the country, that will be all the info that Immigration requires.


make sure you get a good bump in 1099 remuneration since you will be saving them cost of fringe benefits (which they all tout as being so valuable and so costly). Ask for about 30-40% more.

Thanks for your reply...

Let me go back and just ask this question:

Can I get a TN as a contractor?

My lawyer friend is mentioning that if I'm not in the company payroll, a TN won't be valid?

Any official website or information which mentions that TN can be applied for contractors ( not a self-employment case but working for one company) ?

Thanks

Yes, you may be paid on 1099 basis on TN, even if you live in the US on TN. This is not self-sponsorship, which is what is forbidden.

But as I was more concerned you would pick-up on is that you do not even absolutely need TN if you live in Canada and only work ocasionally in US. You would enter as a business visitor.

But TN on 1099 is alawys allowed ,as long as you have a TN for each client you provide services to.

Thanks again for your reply..

As I mentioned in my original post, I'm not going to be in Canada.
So basically, I'll be a TN contractor with one US client, but living outside US and Canada.

I probably return back to US twice per year for 3-4 weeks of work, that is why the TN/contractor status is needed

It seems like it is better for me to get a new TN when I switch from employee to contractor, but my non-Canadian wife has a TD visa, and that is why I prefer to stay on the same TN which I have now.

any comments are appreciated....

Thanks

Your residicne does not have to be in canada to get B1 entry. Of course, if your wife will accompany you, it would be simpler to keep her on TD.
Technically, if your spouse is not living in US, she should not need a TD either, but would need a B1 visa if she is not from a VWP country.

I won't get into whether a TD spouse can live in US when the TN spouse does not; that is another story.

So basically, I'll be a TN contractor with one US client, but living outside US and Canada.

I think your real problem is your tax situation where you are actually residing to be honest. If you are "remotely working" that implies you're working somewhere and that means you have to pay taxes there. Whether you're getting a W-2 or 1099 is academic because you still have to pay taxes on your US-source income in the US.

Whether you're getting a W-2 or 1099 is academic because you still have to pay taxes on your US-source income in the US.

... depending on what the treaty for his country of residence has to say. A 1099 issued to a Cdn resident, fore example, is not automatically taxable in US -- and may not even have to be reported. W-2 income will likely need to be reported, but taxation is subject to thresholds imposed by treaty.