Social security for TN holders

[blakerrr]

Hello all.

I am a Canadian that has been working in the US since mid-January of 2008 on a TN Visa (actually two TN Visas because I changed jobs/companies in July and thus surrendered my first TN and applied for a second TN). With tax season upon us, I am wondering what is going to happen to me with respect to my ties to Canada. Since I didn't work at all in Canada in 2008, will I still have to pay social security and/or taxes to canada? I haven't claimed independence from Canada because I still have a bank account there (with albeit less than $500 in it). Can I fill out a social security exempt form that gets me out of paying social security to Canada? I've been trying to gather information on this, and it seems like if you work in the US for more than 183 days in a calender year, then you can file for social security exemption from Canada and you will be covered by the US government. The thing is, TN Visas require Canadians to leave the US immediately if employment ends. So I'm thinking, what's the point in being covered by the US government (and filing for exemption from the Canadian government) if the end result of me getting laid off is me being sent back to Canada!

Please help! I am so confused here!!!!

[nishant]

If employed by US employer for working in US, social security is deducted from pay.

If you work for contributions of 6 quarters or more, you are eligeble to claim social security when due. This is in addition Canada pension.

As long as you complete 10 years of employment including in US/Canada, you donot lose.

[Steven]

You need to file as a non-resident if you're only in the US temporarily. I.e. you file 1040NR and 8840 in the US, plus you file your T1 as normal in Canada except you claim a foreign tax credit using the information from your W-2s so you don't get taxed twice.

The US and Canada have a totalization agreement for social security, how it works basically is that if you work in the US your contributions count towards CPP when you retire, but as was pointed out to me recently by the CPP people, MAKE SURE YOU KEEP ALL THE PAPERWORK!!! I.e. W-2s, social security statements etc. which show what your social security contributions were in the US.

You don't have to do a CPP contribution as well on top of whatever you paid in the US, however you probably will have to pay some Canadian income tax on top of whatever has been deducted and shown on your W-2 as Canadian rates are higher.

This CRA publication gives a brief overview of how to file as a non-resident in the US, plus read the general guide for the T1 return which explains how to claim a foreign tax credit:

http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html

[mgedeon]

You are not eligible to file Form 8840 if you were present in the US for more than 183 days in 2008.

[Steven]

Yeah sorry I meant 8833, I always get those two mixed up. 8833 is a tricky form to fill in, you should really talk to the IRS non-resident dept. in PA unless you can figure out IRS publication 901.