Working for an american company, from Canada

Hi all,

I've been working for an American company, but living in Canada (paid Canadian dollars) for a year now. Before I started there was a chance that I was going to move to the US to do the job, however plans fell through and I stayed in Canada.

My company got me a TN Visa, which expires on Monday and they are in the process of renewing.

My question is: Do I need a TN Visa? I travel to the states a lot (almost half the year last year, made sure to do less than half to avoid paying both taxes). Can I not travel to the US without a TN in order to do business, as long as I live in Canada? (My visits are generally 5-12 days max).

Also, should I pursue moving to the US, is a TN Visa enough? I don't apply for an H1-B as I do not have a university degree (I have an associates degree according to my most recent evaluation). And to that point, how many years of experience do I need until a degree is no longer necessary?

Thank you so much for all your help!
Benjamin Baril

First of all, spending less than six months in the US doesn't get you out of paying US taxes. If the work is done in the US you have to pay US taxes, the only real exception is if you are directly employed by a Canadian employer and you earn less than $10,000 while in the US (in Canadian dollars, because you are on the Canadian payroll) and spend less than 183 days in the US.

If you're an independent contractor though you have to pay US taxes on your US-source income if the income was earned while you were in the US. Even if you don't do the work in the US you still have to file a 1040NR and an 8833 to declare your US-source income to the IRS, although there's no tax to pay (unless you're under the reporting limit, but you still have to file 8833). As an independent contractor you also have to notify your client of your tax treaty status on Form 8233 otherwise they're supposed to do 30% non-resident alien withholding on Form 1042 on their payments to you.

You certainly can live in the US on TN-1, you just have to show your position and stay in the US are "temporary", which is what the job offer letter should show.

Whether or not you need it depends on the nature of what you're doing in the US. For meetings, taking orders, company training and the like you don't need work authorization, the regular visitor category covers that.

On the tax side what I would suggest you do is go on their payroll and have them issue you a W-2 every year for the payments they do for you, which you would use to complete your 1040NR and T1.

Hrm, thank you for the comprehensive response.

I'm not sure what the definition of 'Working in the states' would be. I'm a technical pre-sales engineer. I build custom demos/proof of concepts for the sales team and sometimes I go on trips to customer sites to present them.

I get paid out of the Toronto office, but I 'work' out of my house mostly, and travel only for meetings/training and the occasional demo at a client site (or if I do an on-site demo build).

This seems like a gray area? Or no?

You need to clarify what your "work" is, the most important point is whether you are getting paid for what you are doing in the US. If you get paid for it, then it's got to be work. If you're on a Canadian payroll with the company in Toronto then the $10,000 limit is the relevant bit of information on the tax side, i.e. do you get paid more than CDN$10,000 a year for what you do in the US? If you do then you've got to do all the US tax paperwork.

If you're only doing presentations in the US and a bit of training for pre-established customers, I think that's probably B-1 from the sounds of it, so no you don't need TN-1. This is one of the things you're allowed to do under B-1 if you're a Canadian citizen:

Installers, repair and maintenance personnel, and supervisors, possessing specialized knowledge essential to a seller's contractual obligation, performing services or training workers to perform services, pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software, purchased from an enterprise located outside the territory of the NAFTA Party into which temporary entry is sought, during the life of the warranty or service agreement.

Which sounds like what you're doing.

Look up B-1 and B-1 NAFTA on the web, B-1 is a broader category for Canadians because of NAFTA.

Visa is required for work only if you are on US soil. You donot need US visa for working for an American company outside of US- Irrespective whether you are paid in US or Canadian dollars.

The situation changes completely when you are on US soil. For doing same online work which was OK when you were outside US, now cannot be done without a visa.

In short your TN visa is required only if you visit and work in US during your visit.