Teleworking for a Canadian Company From US (Tax, Not Visa Q)

Hello,

I'm looking for some advice on a theoretical situation. I'm about to be a dual US-Canadian citizen, presently living in Canada and telecommuting to work for a company in Quebec. Presently I file taxes with the IRS (using the 2555 EZ to exclude my Canadian income), the CRA and Revenu Quebec. In the future we may be moving back to the US, and I may continue working for the Canadian company, while living in the US. The Canadian company does have a few people on contract in the US, but no employees, or business presence there (afaik, except clients - we don't charge US taxes or file a US return I don't think), and I imagine they would continue to pay me in Canadian dollars, although perhaps to a US bank account. I would likely prefer to remain an employee (unless I learn it's better otherwise). In this case:

1) Would the Canadian company still withhold both Canadian federal and Quebec provincial taxes for me as it does now?
1a) If so, I understand that I would then file with the IRS using a foreign tax credit or deduction, to ensure I am not double taxed under the tax treaty.
1b) If so, would I continue to file taxes in all three locations (US, Canada, and QC)? I know from reading the rest of this thread I wouldn't normally continue to file Canadian taxes as a non-resident, but what about QC, is it the same (I would guess so)? Would I need to file a state tax return for whereever I would be living as well?
1c) If so, does that mean my returns would essentially look the same as they do now in terms of how much tax I end up paying to the various goverments?

2) Would it be possible for this company to (easily) get some sort of US employer identification number and withhold only US taxes for me? Any links/info you can point me to in that area?

3) If (2) is not possible, any guesses as to whether it would be more advantageous (eg, letting me keep more of my money) if I were to be considered a consultant rather than an employee of the same company in otherwise the same situation? (I assume the only difference would be that the company wouldn't withhold tax?)
3a) If so, any advice on what I would have to do to become a consultant - eg, do I have to register as a business? - I hope not! If I did have to, any idea how that works?

4) Also, does anyone know how it would work in terms of health care benefits, eg, presently one benefit is health care coverage (on top of the provincial coverage, including prescription drug coverage). Would this coverage be able to continue if I was living in the US, or would I have to find my own private insurance in the US?

Thanks for any help or advice - or pointing me in the direction of finding my own answers even (preferably for free, online as this is all theoretical). I figure someone must have gone through this before!

Elly

Doesn't matter about the bank account they can pay the money into any account, if it's Canadian you need to tell the bank you're non-resident though and you need to file FinCEN FBAR form every year if it's got more than US$10,000 in it.

If you're doing all the work in the US then they either need to get an EIN and do US payroll withholding or you need to set up your own company or register as self-employed and invoice them. It's that simple really.

It you carry on doing work for them on the odd occasion while you're physically in Canada, you file a TD-1 with them that says you're non-resident for tax purposes, they issue you a T4 and you file a non-resident T1 every year to report it. That's the simplest way of doing it otherwise you as a company or self-employed individual need to do the Canadian side of the payroll as well.

As you work in the US you would file the relevant State returns for a company or self-employed individual.

For healthcare you would need the relevant plan, if you start up a company you get a small company plan or alternatively you use a self-employed individual plan.

Thanks for your reply, Steve. If they are able to do the US tax withholding for me, would that mean they would not withhold Canadian federal or provincial taxes (and thus that as a non-resident I would not be paying those taxes while living/working from the US)?

Yes, because effectively you are a US employee working in the US.