Tax implications from payments made by an US company

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csam63New Member
Topic author
Posts: 3
Joined: 24 Oct 2010

Tax implications from payments made by an US company

Post Sun Oct 24, 2010 8:36 am

Hi everyone,

I have to solve a problem for school purposes and I'm stuck as I cannot find any relevan information.

Here is the summary of the problem. The employee was terminated in July as the company has cash flow issues. The company is the wholly owned Canadian subsidiary of a US company. She agreed on 2 months payment as payment in lieu of notice of employment termination. Her monthly gross salary is $6,000 or $4,431 net of tax and payroll deductions. One month after her termination a deposit of $9,500 was made to her bank account but no pay slip was received. The payment was made by the parent company (the US one) rather than the Canadian one who was her employer. In Feb next year she receives her T4 but the $9,500 is not included. What would be the tax implications for the employee, former employer (Canadian subsidiary), and parent company (the US company)?

Thank you!
csam63New Member
Topic author
Posts: 3
Joined: 24 Oct 2010

Re: Tax implications from payments made by an US company

Post Sun Oct 24, 2010 12:59 pm

great. I was just honest instead pretending that this is a real scenario.
csam63New Member
Topic author
Posts: 3
Joined: 24 Oct 2010

Re: Tax implications from payments made by an US company

Post Sun Oct 24, 2010 1:54 pm

since this was a general discussion forum I though that I could get some help; not someone to make my homework (which is more complex that I posted) but to give me some directions. My tax book just simply does not cover such a hypotetical situation, and in this case also there is no teacher to give directions.
Kate2New Member
Posts: 1
Joined: 5 May 2012

Re: Tax implications from payments made by an US company

Post Sat May 05, 2012 12:00 pm

I was sorry to see that a professional response was not made to this person's post. I was interested in seeing the response and disappointed in the lack of professionalism in the response.

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