Need information - Canadian Corp taking US contracts

Hi,

I've done a little research on this but could use help in deciphering the complexities of our situation. We are a Canadian consulting corporation, basically just my husband and I, although we have one employee currently deployed to a contract in the US, and also my husband. These are short-term contracts and we submit invoices to the contracting company which is a staffing company for both guys time. We pay our employee in Canada and deduct and pay his taxes and payroll stuff. My husband and I just draw on the company and call it dividends which we then pay dividend taxes on in Canada. And of course corporate taxes in Canada.

I am not clear on whether we have to pay our employee's payroll taxes in the state he is working in, and also whether our corporation should be registered in some way in the US and paying corporate taxes there. The staffing company is contracting with our corporation and although it is the sponsor of the two TN visas for each guy, it does not subtract any taxes from the payments they send us.

Is this a case of "how long are they in the US?" Our employee's current contract is ending in November and he will be leaving the country and not returning, although there may be another contract in US sometime in 2012 for him. Usually the contracts are for 3-6 months, but they can be extended sometimes. My husband just started a new contract that is supposed to be 9 weeks, but the staffing company says they will have more contracts in the US for him to start after that.

answered on serbinski