Work remotely from Canada for US Employer

[sanchalanam]

Hello Friends,

I have PR Status in Canada. Currently i am living and work in US. I am planning to relocate to Canada in the next few months to maintain my PR Status. Also, i am thinking to work for my current employer remotely from Canada. My Current employer doesn't have a branch office in Canada. I am currently living in US on work Visa (H1b) and I am not US Citizen.

Assuming that my US employer allows me to work remotely from Canada, what complication and (or) issues I could run into in this situation?

1) How and from where should my Payroll be processed, US or Canada? or it doesn't matter?

2) If my US employer is not willing to run payroll from Canada. Can i still get paid in US but live in Canada?

2.a) In Canada, will i be considered employed or unemployed? how can i show my earning is US as my income in Canada?
2.b) what are the tax filing obligations? do i have to file taxes in Canada or US or Both?

3) *pardon me for the following question. I know that this is a Canada forum, but just want to group this question along with the other questions* .
As I am on work visa in US. Is it possible to maintain my work visa (H1 B) in US while working remotely from Canada? If yes, how is it possible.

Thanks in advance.

Santhi

 

[sanchalanam]

Gurus, please post some info....

 

[agrisiva]

Hi,

I am exactly in the same situation. I am a Canadian PR holder, working remotely for a US University (has valid H1b visa) while living in Calgary. I have to file 1040 NR showing just US income and then file Canadian return showing US & Canadian incomes and get deductions for taxes paid to US.

 

[computergeek]

You can live in one jurisdiction and work in another. The general rule is that one owes income taxes in the country in which one is employed FIRST and then the country in which one lives SECOND. So, you would pay US taxes and then on your Canadian return claim an offsetting credit for the US tax liability (which means, not withholding, but actual tax due.) This INCLUDES US social security and medicare tax, as well as US income taxes (including state taxes.)

However, the fact you will be working in Canada makes this more complicated (versus driving over the border to perform your services.) The real liability likely falls on your EMPLOYER though, not on you, but were I you I'd find someone familiar with both US and Canadian tax law (including the most exercised tax treaty in the world - that between the US and Canada.) You want to make sure that you are not exposed in any fashion. One good thing: the US and Canada have a totalization agreement, so what you pay into US social security will count against Canadian CPP.

It's far simpler if you do this as a contract position (in which case you are no longer an employee, you are an independent contractor.) But that's a complex shift, so I would strongly recommend speaking with an experienced accountant.

Your requirement to stop filing a US tax return would only end when you ceased earning any US income.

I'm not sure how working remotely in the fashion you described would affect your H1B visa.

Good luck!

 

[agrisiva]

this is not an Immigration forum, but just a quick note regarding my case. My employer (a public Univerisity) is keeping me on their payroll as a w-2 salaried employee while i hold a valid h1b petition + visa. As long as i get paid at least the minimum wage specified on my H1b labor, the International office said that they are fine and they dont care if i live inside or outside the country. I have been on such status past 2 years. Twice a year i go and visit my coworkers on h1b status. Regarding Taxes, i file both US and Canada myself, and didnt pay $350 to H&R block.

 

[computergeek]

Regarding Taxes, i file both US and Canada myself, and didnt pay $350 to H&R block.

If H&R Block would do my tax return for $350, I would pay it in a heartbeat. Unfortunately, the estimates I usually get for return preparation are in the $10,000 range, so I just do it myself (which is getting easier with time.) Last year my US return (filed at the end of the extension period in October) was 81 pages, including some 51 pages of informational returns. To be honest, I'm not sure I'd trust H&R Block to file my returns correctly.

I suspect tax law may be one of the very few areas that is even more screwed up than immigration law, at least in the US.

 

[jes_ON]

Your requirement to stop filing a US tax return would only end when you ceased earning any US income.

This is only true if you are NOT a US Citizen, permanent resident, or other deemed "US Person."

If you ARE a US Citzen/PR/person, then you are required to file a tax return annually on worldwide income, regardless of whether you have any US income. If you exclusively earned income in Canada, you would still have to file a return in the USA.

 

[sippon77]

Hi,

I am in a similar situation - I have a US H1B, but my husband is relocating to Canada. Can i Live in Canada with him but continue to work in US on the H1B? My company is OK with me doing this as long as I work as a Independent Contractor.

If I work as a independent contractor then who will hold my H1? Will my current company continue to hold the H1?
Any pointers on this will be extremely helpful.

 

[agrisiva]

Yes, I pay US Fed & state taxes as a non-resident, then pay the balance amount to CRA.
Yes, I am maintaining my H1B, while living in Canada.
No changes to my H1B LC as the location is still the same, its just me living away and remotely working.
CRA collects both federal and provincial taxes together. US salary is just a foreign employment income, and its simply added to the 2nd line next to Canadian job incomes.
Both the US income as well as US taxes paid will have to be converted from USD to CAD on your CRA returns.
/Siva.

 

[tabarnouche]

So glad I stumbled upon this.

I've just received my COPR and will be landing any day now. I'm currently a resident of Maryland and have been working remotely for a company in Wash DC.

Luckily for me my American employer is committed to making this work, but what exactly will we need to do paperwork wise? I'll continue to be paid USD directly to my American bank account. As I'll no longer be a resident of Maryland, I'm assuming that state taxes will no longer be deducted from my paycheck, but it sounds like that might not be true.

I understand that Canadian taxes are based on your residency, so was expecting I'll need to be paying them first and filing a foreign credit on my US taxes. But maybe I've got that backwards.

Is anyone familiar with what I'll need to do? Can I continue, business as usual with my old state residency or do I need to file something noting I'm no longer residing in the States? Anyone know an accountant who deals with US/Canadian employment issues like this in the Montreal area?

 

[computergeek]

So glad I stumbled upon this.

I've just received my COPR and will be landing any day now. I'm currently a resident of Maryland and have been working remotely for a company in Wash DC.

Luckily for me my American employer is committed to making this work, but what exactly will we need to do paperwork wise? I'll continue to be paid USD directly to my American bank account. As I'll no longer be a resident of Maryland, I'm assuming that state taxes will no longer be deducted from my paycheck, but it sounds like that might not be true.

I understand that Canadian taxes are based on your residency, so was expecting I'll need to be paying them first and filing a foreign credit on my US taxes. But maybe I've got that backwards.

This does require a bit of careful planning. If you are outside the US but still working for a US employer, you should submit a W-4 (there's a hideously complex computation you do for income earned outside the US, which is pretty close to figuring out your estimated US tax liability, plus a special form. I think the last time I did this I had something like 88 exemptions...) That means your employer will continue to deduct US social security and medicare from your income, but not income tax. You will need to pay estimated tax payments to Canada throughout the year (since you don't have any withholding).

When you file, you will do your Canadian return first. You get to show the social security and medicare taxes as a foreign tax credit on your Canadian return. Then you compute your US tax liability and can take your Canadian tax liability as a credit on your return.

Note that if you are married, you will need to decide if you want to do "married filing separate" or "married filing joint" on your US return (there is no joint filing in Canada - you just cross reference to one another's returns). If you do married filing joint be careful about your Canadian spouse's TFSAs and RRSPs as those must be declared on your (joint) US tax return. A TFSA requires 10 PAGES of forms for any year in which there is a contribution and 6 pages for any year in which there is not a contribution - plus you are supposed to get an EIN for each TFSA. RRSPs have a special 1 page form.

The US tax system hates expats.

Is anyone familiar with what I'll need to do? Can I continue, business as usual with my old state residency or do I need to file something noting I'm no longer residing in the States? Anyone know an accountant who deals with US/Canadian employment issues like this in the Montreal area?

You are no longer resident in any US state, so you don't need to file a state income tax return (you might need to do one for your last partial year). In Canada you actually do file a provincial return, it just happens to be at the same time as the Canadian return.

 

[sonia6285]

I am on L2 visa with EAD in US and will be moving to Canada in May. Can i work remotely for my US employer from Canada till June? My EAD expires in June.

Kindly someone help.

 

[TangoCharlie1234]

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 my wife 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. If with same amount as stated above, will her advisor need to pay any tax for money paid to her?

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

5. 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 any legality, please add in your reply here, i would be grateful if anyone can help. Thanks

TD

 

[branid1234]

Hi everyone,

Seeking some assistance please. I am a Canadian resident living in Canada and will be looking to start employment with a US company who has a Canadian office/entity here. While I haven't finalized my employment offer, we are extremely close to doing so.

Here's the question:

1) Is it possible to be paid in USD while living/working in Canada for US company or because my company has a Canadian entity do I need to be paid in CDN dollars? Reason I ask is with the exchange rate it's such an advantage right now.
2) How would the taxes work in this situation if I'm paid in USD? Do I see deductions with the IRS or with CRA (Canadian equivalent)?

Any advice on who to contact to discuss further is appreciated!

Take care

 

[remotework]

Hello branid1234

What happened in your case? Did they pay you in US dollar or Canadian Dollar?

Hi everyone,

Seeking some assistance please. I am a Canadian resident living in Canada and will be looking to start employment with a US company who has a Canadian office/entity here. While I haven't finalized my employment offer, we are extremely close to doing so.

Here's the question:

1) Is it possible to be paid in USD while living/working in Canada for US company or because my company has a Canadian entity do I need to be paid in CDN dollars? Reason I ask is with the exchange rate it's such an advantage right now.
2) How would the taxes work in this situation if I'm paid in USD? Do I see deductions with the IRS or with CRA (Canadian equivalent)?

Any advice on who to contact to discuss further is appreciated!

Take care