Tax-help-live in canada work for u.s. company

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usagisisaJunior Member
Posts: 13
Joined: Thu Nov 01, 2007 6:46 am

Re: Tax-help-live in canada work for u.s. company

Post Tue Sep 15, 2009 9:39 am

Hi Steve,

I have a similar situation to mwberyl. I work for a US company, get a US salary, travel to the US to do some work but live in Canada and do most of my work from here. One step further, my company is in the process of establishing a Canadian business (obtaining a Canadian business number, setting up a canadian payroll..etc.). I am now being told that since my work is split between the US and Canada, even though we are switching to a Canadian payroll, the company will be witholding my taxes in the US in addition to my Canadian taxes. Is that common? I have been given a t1213 by my employer, that I need to fill out and send to the CRA. Am I supposed to estimate the days spent in the US vs Canada? How will the company withold? Based on that same estimate perhaps?

I'm very confused. Can you help shed some light on what ideally should happen in this case?
usagisisaJunior Member
Posts: 13
Joined: Thu Nov 01, 2007 6:46 am

Re: Tax-help-live in canada work for u.s. company

Post Tue Sep 15, 2009 10:39 am

Thanks agnelson.

This is a fairly new situation. Although I am Canadian, I was living and working in the US up until May.

So, in essence, the T1213 form is a request to the Canadian government to reduce the amount of taxes that are witheld on my paycheque for the CRA, to accomodate whatever is witheld for the IRS. Is that right? So in theory, when it all nets out I should be effectively taxed at the higher rate (Canadian), however the US is claiming some of that tax money on the basis that a portion of it was earned in the US. And that amount witheld for the IRS is determined by the amount of time worked and a certain tax rate? Is that correct?
If so, then I would want a good estimate of my potential US-Canada time split. Are the respective tax rates automatically applied?
usagisisaJunior Member
Posts: 13
Joined: Thu Nov 01, 2007 6:46 am

Re: Tax-help-live in canada work for u.s. company

Post Thu Sep 24, 2009 10:43 am

Thanks for the advice! Will let you know how it goes.

:)

-- Tue Feb 22, 2011 5:58 am --

Hi guys,

Here's the update. To refresh: I am a Canadian citizen, working for a US Company as a full employee. I used to be based in one of our US offices. I wasn't able to cut ties with Canada, so I had to deal with submitting Canadian and US federal and state tax returns and applying for foreign tax credits...etc...huge hassle. However, since Sept 2009, I made arrangements with my company to come home and work from Canada. The company has set up a Canadian payroll for a few of us in this similar, remote-working situation. All my income is in Candian dollars. My company pays me in Canadian dollars with a Canadian payroll. I have a TN, and still go to the US occasionally for work purposes, (meetings with clients and colleagues, etc.) but the bulk of my work is done from home in Canada.

As you guys predicted, for 2010, my company issued me a T4 AND a W2, and told me that they reduced the amount of Canadian federal tax withheld on my Dec paycheques to account for (and assumedly pay tax on) time and work done in the US over the course of the year. However, I was never paid any US income, yet I've been given a W2 showing a gross US income (just barely over $10,000) with US taxes withhled. However, my CAD income was not reduced by this similar amount. I was paid fully in CAD, they just reduced the amount of Canadian tax withheld during the December pay period, with no adjustment to my T4. Now, it will look like I have more income than I was actually paid. When I fill out my Canadian tax return, won't I have to ADD the W2 to my T4 gross income number? Is this a mistake? Won't I get double taxed on that "extra" income listed on my W2?

I can't simply "ignore" the W2, can I?

Thanks!

-- Fri Mar 04, 2011 7:52 am --

Is there anyone who can help me??
AyubNew Member
Posts: 2
Joined: Sun Oct 09, 2011 8:16 am

Re: Tax-help-live in canada work for u.s. company

Post Sun Oct 09, 2011 8:34 am

Hello,

I have few tax questions. Here is my situations.
I am IT consultant and Canadian citizen and own a Canadian corporation. I recently got offered for 6months consultant job in USA. I will be doing most of the work from home here in Canada. I will have to go see client for first 2 weeks then I return to continue the work from home.
I will be working for recruiter who I have to invoice from my corporation and they will pay me in US dollars in US bank account.

Here are my questions:
1) Do i have to open/register a corporation in USA for this consultancy work? If so any links to help me register as a Canadian?

2) When i Invoice the company how much taxes I add to invoice. its in Cleavland Ohio.

3) Since I am working from home in Canada do i have to pay Taxes here in Canada (CPP) and in USA?

Thanks and great forum.

Ayub
mmalik1981New Member
Posts: 1
Joined: Mon Apr 29, 2013 12:26 pm

Re: Tax-help-live in canada work for u.s. company

Post Mon Apr 29, 2013 12:34 pm

Hi Steve (or anyone else who can answer my query)!

I am in the same boat. I just moved to Canada as a Permanent Resident and want to continue my association with my previous company in the USA. I was thinking of setting up a company here in the US (self employed versus INC, please suggest) and have the US company pay my company in Canada in Canadian Dollars. Is there a tax implication on the US company? Is this as simple as it sounds or are there heavy tax complications I need to deal with (since I am going to be getting more than a 100K)? Please suggest.

Thanks
RuneashNew Member
Posts: 1
Joined: Sat Jan 04, 2014 6:23 am

Re: Tax-help-live in canada work for u.s. company

Post Sat Jan 04, 2014 6:34 am

I have opportunity to work from home for us company but does require me to travel within US to install their software at client locations. What is easiest option for employer and myself whether i be self employed or contractor. Also how to explain to employer easily that it is ok that i am canadian citizen so they do not get confused about the process of how this paying would work? Do i need a TN visa? How will this s the opportunity full time.
asaneNew Member
Posts: 1
Joined: Wed Jan 22, 2014 8:28 pm

Re: Tax-help-live in canada work for u.s. company

Post Wed Jan 22, 2014 8:53 pm

I am a US citizen living in the USA and recently married a Canadian Citizen/Resident and want to move to Canada. I currently work from home for US company in Sales and some of what I sell is sold to Canadian customers (we invoice only USD). My company has considered letting me "work from home" in Canada, but cites tax complications a reason to not allow it. Even if I work from "home in Canada," I will still have to make business trips to the US.

I've been reading several of these posts and while much is said about what I can personally do, I haven't found how this affects the company and I'm still confused.

Is there a way to for me to continue working for the company without costing them more money in taxes?

Can I remain a direct employee with USA tax withholdings without them having to establish a "Canadian presence." If yes, what changes happen on their end?

If not, does becoming a self-employed Contractor (best to be paid in USD? CAD?) require them to pay extra Canadian taxes, GST, etc?

Is there another arrangement that would be best for both parties?

Do I need a Canadian work visa?

I still need to apply for my Canadian residency. I've read that I might be able to stay in Canada while I wait for it to go through. Can I continue working for a USA company?

Can you recommend any decent yet affordable professionals that I can consult regarding this issue?

Thank you for any advice.
timeladyNew Member
Posts: 1
Joined: Wed Mar 12, 2014 2:52 pm

Re: Tax-help-live in canada work for u.s. company

Post Wed Mar 12, 2014 3:41 pm

I'm a US citizen who recently became a permanent resident of Canada. I plan to get a regular office job here in Canada, so I will definitely be paying taxes through that route!

I also started doing some freelance-type work shortly before I moved here to Canada:

A) I produce a podcast for a US-based magazine. I get paid $30 every three months. I suppose you could say I "invoice" them, but really, I just send an email reminding them to pay me. Currently, they send me a paper check.

B) I have a Patreon site for my personal blog. People pledge money, and I get paid per blog post. Patreon is located in the US. My earnings are so far less than $50/month. I haven't received payment yet, because I haven't amassed enough to get a payout.

C) I produce a podcast with several other women across the globe. I'm in charge of paying for the hosting services, and we will soon be starting a Patreon page for the podcast so I'll be handling those US-based funds as well. We'll be putting all the money back into the podcast, less whatever I have to pay in taxes (to whichever country is appropriate).

Here are my questions:

1) I haven't filed any type of paperwork (in either country) saying I'm self-employed. Do I need to do that? Would that interfere with my ability to find a regular full-time job? (This is all side-project stuff, almost "hobby income.")

2) I can have Patreon funds mailed to me in Canada as a paper check, or I can have the money direct-deposited to my US bank account (which is still open). Would one be wiser than the other, from an international tax perspective?

3) I'd love to go speak with an accountant/tax professional who's knowledgeable about international banking to make sure I'm doing things right and making smart choices. Does anyone know of a person or service in the Edmonton, AB area that I might contact?

Any help would be greatly appreciated!
IshitaNew Member
Posts: 1
Joined: Mon Jun 09, 2014 2:12 pm

Re: Tax-help-live in canada work for u.s. company

Post Mon Jun 09, 2014 2:48 pm

Hi,

I was living earlier in US on Visa and was working for a US company. My husband has been posted to Canada so we have to move to Canada. I have got my open work permit in Canada. I have read most of the posts here and have some taxation related questions.... I wish to continue working for the same US company. They do not have any office here.... Can I register myself as a self employed here in Canada and bill them for the consultancy services which I can do for them from home....??? Can they pay me directly in my Canadian bank account.....???? Do I have to pay taxes for US too....Please can you help me with this complicated situation .... The annual income generated will be less than 100000 USD. I will not be on their payroll. Thanks.
tsethiNew Member
Posts: 4
Joined: Wed Nov 26, 2014 1:21 pm

Re: Tax-help-live in canada work for u.s. company

Post Wed Nov 26, 2014 1:29 pm

Hi guys, I have a question may be someone can help me pleaseee.
I and my wife would be moving to canada on PR visa in next few months, she here works for a US firm as a financial planner supporting her Advisors in US. Now her advisor is willing to take her onboard as we move to canada but i know it would not be possible to apply a TN visa. She holds a 10 year B1/B2 visa to US till 2023. Below are my doubts if anyone can answer here:

1. If she can work for her advisor as a self employeed contractor from canada remotely (will her advisor file any paperwork for her or the work)? considering no work will be performed by her in US.

2. if the amount is around 20K - 30K per annum USD, does she need to file any taxes or legal forms in US (she does not have any SSN or social number for US)

3. can her advisor pay her directly in USD and in that case (would she file any taxes for the amount her advisor will pay)??

4. are there any legal paperwork from our side that needs to be done in canada other than filing taxes for what she will earn from US?

Is there anything i am missing in my question above and you know of, please reply back, i would be greatful if anyone can help. Thanks

TD

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