In the next year I will be marrying my American boyfriend and moving to the US. However, I plan to keep my Canadian job as it pays almost double what I would make in the US. It's a contract job so I would be in Canada around 3-4 months of the year working at this contract position.
How would my taxes work? I'm sure Canada will continue to do deductions, do I have to get that money back somehow and then pay it to the Americans? Do I pay at American rates or Canadian? Is it complicated? I've been looking at the internet but can't find any info that fits my situation of continuing to work in Canada while being a legal resident of the US. I'm worried both countries will consider themselves entitled to my taxes, which would wipe out my income. I really want to keep the Canadian job as it pays so well and is interesting work, and doesn't have a comparable version in the US.
As well, what if I was to be in Canada for over half the year? Could I then be considered a resident of Canada, despite being married to an American and spending the rest of my time there? In that case, would I continue to pay Canadian taxes? I own a home in Canada that I will be keeping, and will be living there part of the time that I am in Canada.
Thanks for any help.
Canadian marrying American but continuing to work in Canada
Moderator: Mark T Serbinski CA CPA
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Technicalglitch
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In Canada's eyes, regardless of the fact that you marry an American, you will remain a Cdn resident, since you are failing to give up any residential ties AND you are spending too much time in canada. In other words, you aren't moving, according to what you write.
You need to break ties.
In US, you will be getting green card, so will have to file a US tax return, likely joint with your spouse, reporting world income.
So, you will be treated like a US citizen living in Canada, reporting all income to both countries, taxed primarily in canada, and likely owing nothing in US.
You need to break ties.
In US, you will be getting green card, so will have to file a US tax return, likely joint with your spouse, reporting world income.
So, you will be treated like a US citizen living in Canada, reporting all income to both countries, taxed primarily in canada, and likely owing nothing in US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
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Technicalglitch
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Thanks for the reply.
Why wouldn't I owe any taxes in the U.S. if I'm on a green card? They consider green card carriers to be residents, and indeed, I have to be there over 1/2 the year to keep the green card. Is there something in the tax treaty that makes me keep paying taxes in Canada (and releases my obligation to the US) as I will still keep a home (that I own and that isn't rented out) there? What is it about my scenario (the earlier one where I am in Canada less than 1/2 the year) that would make my taxes be paid in Canada?
Why wouldn't I owe any taxes in the U.S. if I'm on a green card? They consider green card carriers to be residents, and indeed, I have to be there over 1/2 the year to keep the green card. Is there something in the tax treaty that makes me keep paying taxes in Canada (and releases my obligation to the US) as I will still keep a home (that I own and that isn't rented out) there? What is it about my scenario (the earlier one where I am in Canada less than 1/2 the year) that would make my taxes be paid in Canada?
99% of american taxpayers living in canada owe no taxes to IRS, simply because the credit they get for the Cdn taxes they pay cancels out any IRS tax liability.
You do realize thatas a green card holder (like a US citizen) you will ALWAYS report all income in US. There is nothing you can do to get around this. Doesn't matter how much/little time you spend in US.
And if you work in canada, that income is ALWAYS taxed in canada, regardless of where you live. You say the position is a "contract" job. However you appear to be having tax withheld at source, which would tell me that you are an employee of the firm. If you reamin an employee, you will stillowe tax in canada on that income even if you are a US resident.
If you moved to US, to stop having to pay Cdn tax on your employment income, you would truly have to become a contractor. that is, they cut you a check, no withholding, no benefits. Or witholding is done at flat non-residnt rate.
The fact that you have a house in canada is not really that big a deal in determining your residnce. Of course, if you were to get rid of the house, or rent it out, you would be a US resident without question. But even if you keep it for your own use, then the amount of time you spend in US/Canada becomes the deciing factor, as you seem to realize. You would need to alawys be in Canada less than 183 days in ANY 12-month period, not just calendar year.
If you were now living in US and decided to take up this Cdn job for 3-4 months a year, I could easily make the case that you were still a US resident. But the fact that you are a Cdn resident means you have to be a little more proactive at breaking residency.
Besides, once you become a US resident, your Cdn house becomes, in essence a cottage (a non-resident of canada cannot have a principal residence in canada) so your house would beging being taxable in canada (and US). You might not want that.
So, for you to become Cdn non-resident -- if that is what you want -- , in my opinion, you have to
(a) make sure EVERYONE that pays you (bank, RRSP manager, company, etc) is told that you are a US resident, the day you move/marry/ get GC.
(b) you get a FMV evaluation on your home done for the time you leave canada.
(c) you should have a substantial 'break' at some point at your work, after changing your job to a contractor to show that when you work in canada you are just visiting for work.
Otherwise, just keep everything as is, continue to pay Cdn taxes, and when you eventually sell your house or quit your job, you will become CDn non-resident.
You do realize thatas a green card holder (like a US citizen) you will ALWAYS report all income in US. There is nothing you can do to get around this. Doesn't matter how much/little time you spend in US.
And if you work in canada, that income is ALWAYS taxed in canada, regardless of where you live. You say the position is a "contract" job. However you appear to be having tax withheld at source, which would tell me that you are an employee of the firm. If you reamin an employee, you will stillowe tax in canada on that income even if you are a US resident.
If you moved to US, to stop having to pay Cdn tax on your employment income, you would truly have to become a contractor. that is, they cut you a check, no withholding, no benefits. Or witholding is done at flat non-residnt rate.
The fact that you have a house in canada is not really that big a deal in determining your residnce. Of course, if you were to get rid of the house, or rent it out, you would be a US resident without question. But even if you keep it for your own use, then the amount of time you spend in US/Canada becomes the deciing factor, as you seem to realize. You would need to alawys be in Canada less than 183 days in ANY 12-month period, not just calendar year.
If you were now living in US and decided to take up this Cdn job for 3-4 months a year, I could easily make the case that you were still a US resident. But the fact that you are a Cdn resident means you have to be a little more proactive at breaking residency.
Besides, once you become a US resident, your Cdn house becomes, in essence a cottage (a non-resident of canada cannot have a principal residence in canada) so your house would beging being taxable in canada (and US). You might not want that.
So, for you to become Cdn non-resident -- if that is what you want -- , in my opinion, you have to
(a) make sure EVERYONE that pays you (bank, RRSP manager, company, etc) is told that you are a US resident, the day you move/marry/ get GC.
(b) you get a FMV evaluation on your home done for the time you leave canada.
(c) you should have a substantial 'break' at some point at your work, after changing your job to a contractor to show that when you work in canada you are just visiting for work.
Otherwise, just keep everything as is, continue to pay Cdn taxes, and when you eventually sell your house or quit your job, you will become CDn non-resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
By the way, something that might force your hand is US immigration. As you may know, once you marry a USC, yo ucannot easily cross the border back and forth, until you get some documentation for US immigration that says you can (I-131).
So, once you marry you may be styng in US for awhile once your paperwork is filed.
This would be the break I mentionned that would definitely help in establishing your US tax residency and breaking Cdn tax residency.
So, once you marry you may be styng in US for awhile once your paperwork is filed.
This would be the break I mentionned that would definitely help in establishing your US tax residency and breaking Cdn tax residency.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Technicalglitch
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Yes, I'm an employee when I am working, with all taxes and other stuff withheld. It's a contract job; nothing regular, when I want work and they need an employee (they usually do) we set dates and they write a short-term contract.
So, they would always withhold taxes from me then, and from the sounds of it, Canada keeps them as they were earned in Canada by a Canadian? Would this always be the case, if I didn't go to any extra effort to break residential ties to Canada?
I'd love to keep Canada considering me as a resident, for health care and social program reasons, but technically I think I lose that once I am out of the country for over 183 days, although maybe they're not too vigorous in enforcing that, do you know?
I figure I probably pay more tax in Canada than I would in the US but it would probably be close, so it doesn't bother me too much which country gets it, as long as the US doesn't expect me to pay it when Canada already has it and maybe wouldn't want to let go.
Are there any layperson-friendly places on the web to read more about that? I find stuff but it rarely applies to my situation, most Canadians want to work in the US so it's a little unusual to be getting a green card (through fiance/marriage) but then to keep going home to Canada to work.
Thanks for all the help you are giving me, I appreciate it.
So, they would always withhold taxes from me then, and from the sounds of it, Canada keeps them as they were earned in Canada by a Canadian? Would this always be the case, if I didn't go to any extra effort to break residential ties to Canada?
I'd love to keep Canada considering me as a resident, for health care and social program reasons, but technically I think I lose that once I am out of the country for over 183 days, although maybe they're not too vigorous in enforcing that, do you know?
I figure I probably pay more tax in Canada than I would in the US but it would probably be close, so it doesn't bother me too much which country gets it, as long as the US doesn't expect me to pay it when Canada already has it and maybe wouldn't want to let go.
Are there any layperson-friendly places on the web to read more about that? I find stuff but it rarely applies to my situation, most Canadians want to work in the US so it's a little unusual to be getting a green card (through fiance/marriage) but then to keep going home to Canada to work.
Thanks for all the help you are giving me, I appreciate it.
"So, they would always withhold taxes from me then, and from the sounds of it, Canada keeps them as they were earned in Canada by a Canadian? Would this always be the case, if I didn't go to any extra effort to break residential ties to Canada?"
Yes, employment income is taxed in the province it is earned, regardless of country of residence. I would be pushing to go self-employed. Cdn fringe benefits aren't much use to a US resident.
"....technically I think I lose that once I am out of the country for over 183 days, although maybe they're not too vigorous in enforcing that, do you know?"
You would lose OHIP within 6 months. no point holding onto it. Your spouse's job insurance will cover your US medical insurance, and OHIP isn't much good in US anyways.
I figure I probably pay more tax in Canada than I would in the US but it would probably be close, so it doesn't bother me too much which country gets it, as long as the US doesn't expect me to pay it when Canada already has it and maybe wouldn't want to let go.
The thing is that you don't want to pay in both countries, especially in both the province and state. Remember that whatever you do, you WILL be reporting your income on hubby's return, and that may mean more tax in US, espaecially your state. By going self-employed, you avaid Cdn tax altogether.
Are there any layperson-friendly places on the web to read more about that? I find stuff but it rarely applies to my situation, most Canadians want to work in the US so it's a little unusual to be getting a green card (through fiance/marriage) but then to keep going home to Canada to work.
This is a lay-person friendly site. Your situation is indeed rare, so there is no point looking for situation specific information. As I said, US immigration will want you in US for a while, so that will establish the break you need for US tax residency/Cdn non-residency. your house in canada will become a cottage, your job in canada (unless you go self-employed) will be the only thing taxed (not your US house and other investments you will have in US), plus the growth on your cottage.
Yes, employment income is taxed in the province it is earned, regardless of country of residence. I would be pushing to go self-employed. Cdn fringe benefits aren't much use to a US resident.
"....technically I think I lose that once I am out of the country for over 183 days, although maybe they're not too vigorous in enforcing that, do you know?"
You would lose OHIP within 6 months. no point holding onto it. Your spouse's job insurance will cover your US medical insurance, and OHIP isn't much good in US anyways.
I figure I probably pay more tax in Canada than I would in the US but it would probably be close, so it doesn't bother me too much which country gets it, as long as the US doesn't expect me to pay it when Canada already has it and maybe wouldn't want to let go.
The thing is that you don't want to pay in both countries, especially in both the province and state. Remember that whatever you do, you WILL be reporting your income on hubby's return, and that may mean more tax in US, espaecially your state. By going self-employed, you avaid Cdn tax altogether.
Are there any layperson-friendly places on the web to read more about that? I find stuff but it rarely applies to my situation, most Canadians want to work in the US so it's a little unusual to be getting a green card (through fiance/marriage) but then to keep going home to Canada to work.
This is a lay-person friendly site. Your situation is indeed rare, so there is no point looking for situation specific information. As I said, US immigration will want you in US for a while, so that will establish the break you need for US tax residency/Cdn non-residency. your house in canada will become a cottage, your job in canada (unless you go self-employed) will be the only thing taxed (not your US house and other investments you will have in US), plus the growth on your cottage.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Technicalglitch
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- Joined: Sun Jul 24, 2011 7:51 pm
Thanks for the replies.
I still don't completely get it, and i read some other pages on the site since I last posted.
I understand the part that Canada will withhold my taxes at source when I earn them.
What I don't get is if I have an American green card, how I'm not expected to pay them in the US. Won't America say pay us and not Canada? How is it that I will be exempted from paying in the US? I'm very new to this, so I don't have any pre-existing knowledge in this area, other than knowing there is a tax treaty and people don't pay in both countries. I can't pay in both countries, my income is high enough that I would be left with nothing if I did.
I get it that I have to report my Canadian income in the US, but what I don't get is why Canada keeps it and the US supposedly doesn't expect it. From everything I have read the US does expect it. Can you explain it to me?
I still don't completely get it, and i read some other pages on the site since I last posted.
I understand the part that Canada will withhold my taxes at source when I earn them.
What I don't get is if I have an American green card, how I'm not expected to pay them in the US. Won't America say pay us and not Canada? How is it that I will be exempted from paying in the US? I'm very new to this, so I don't have any pre-existing knowledge in this area, other than knowing there is a tax treaty and people don't pay in both countries. I can't pay in both countries, my income is high enough that I would be left with nothing if I did.
I get it that I have to report my Canadian income in the US, but what I don't get is why Canada keeps it and the US supposedly doesn't expect it. From everything I have read the US does expect it. Can you explain it to me?
While you need to report all income to US because of your green card, taxation is still primarily by source first. Cdn employemnt income is sourced in canada, this canada gets first crack at the tax. US also taxes you, but has to give credit for the Cdn tax. Since Cdn tax is a lot more than US tax, there is little if any to pay to IRS.
Self-employed income earned in canada, if you live in the US, is ONLY taxed in US, thus saving the hassle of Cdn tax filing, and saving you taxes in the long run (along with higher income as contractor).
Self-employed income earned in canada, if you live in the US, is ONLY taxed in US, thus saving the hassle of Cdn tax filing, and saving you taxes in the long run (along with higher income as contractor).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Technicalglitch
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Globetrotter
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Hello,
Please allow me to step in since I'm in a very similar situation and have a hard time finding answers.
I'll be joining my USC husband soon in the US. I am currently employed by a Cdn company that has no representation in the US and I can work from home with my laptop and skype. I'm quite keen on keeping my job. If I understand you correctly, it would be best to ask my employer to change my status to contractual and to file in the US at the end of the year? However would I be expected to make advance tax payments to the IRS?
Secondly, I now understand that while I am waiting for my GC, I won't be allowed to go to Canada back and forth? Can you please explain how complicated that would be if I needed to go to some meetings once a month or so?
Thank you so much!
Please allow me to step in since I'm in a very similar situation and have a hard time finding answers.
I'll be joining my USC husband soon in the US. I am currently employed by a Cdn company that has no representation in the US and I can work from home with my laptop and skype. I'm quite keen on keeping my job. If I understand you correctly, it would be best to ask my employer to change my status to contractual and to file in the US at the end of the year? However would I be expected to make advance tax payments to the IRS?
Secondly, I now understand that while I am waiting for my GC, I won't be allowed to go to Canada back and forth? Can you please explain how complicated that would be if I needed to go to some meetings once a month or so?
Thank you so much!
If you work in US as a contractor, your tax liability will be with IRS, not CRA. Thus you wqill need to set aside about 25% of your gross to remit to IRS, to be safe. You will be filing jointly with spouse, so he could always increas his withholding to cover you.
In the first year of IRS taxes there is plenty of margin for wrror, but all US self-employed are always advised to send 25% of gross, i quartterly payments to IRS and state, you can split according to state tax rate.
When you immigrate to US, you either get a visa to enter US before marriage (which could take time ) or you enter and then marry and adjust(which takes 2-3 months), during which time you are stuck in US.
You need to look at a us marriage help forum like visajourney.com
In the first year of IRS taxes there is plenty of margin for wrror, but all US self-employed are always advised to send 25% of gross, i quartterly payments to IRS and state, you can split according to state tax rate.
When you immigrate to US, you either get a visa to enter US before marriage (which could take time ) or you enter and then marry and adjust(which takes 2-3 months), during which time you are stuck in US.
You need to look at a us marriage help forum like visajourney.com
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing