employer obligations for hiring Canadian contractor

Does anyone know what the employer's federal reporting obligations are for hiring a Canadian contractor under TN (ie: US employer pays Canadian company of the TN holder)? Or is this no different from hiring a local contractor?

-- Tue May 24, 2011 4:41 pm --

Hello, I am sure someone on this forum must have at somepoint hired a Canadian or knows of someone who has hired a Canadian on corp-to-corp- any suggestion/comments are appreciated!!

Wow, you waited a whole 10 hours before repeating your question....


And such a vague question, too!!

I'll have your answer tomorrow!!

agnelson, sorry for being vague (and in a hurry). I have a US employer who is interested in hiring Canadian tallent on a corp-to-corp basis on TN, but this would be their first time looking outside of US. Their concerns were mainly extra paper work in reporting to the tax office, but if I remember correctly, TN on corp-to-corp is the same as hiring an american when you show your expenses? I just want to make sure I am giving them the right information. I hope this is a little clear and again, sorry i was not too clear in my op.

well, they do have to sponsor your TN, which is a whole lot more complicated than any reporting they would need to do to the IRS.

But, tax-wise, if your corporation is a foreign corporation, payments to it are subject to withholding, just like a non-resident alien contractor being paid directly, unless and until you provide the payor with the forms/paperwork which would absolve them from withholding, like a W-8BEN.

That makes sense, thank you for your reply.