I've spoken to an accountant regarding this issue, but I want a second opinion.
I'm a Canadian permanent resident and my American company is continuing to pay me in USD to my American bank account. US income tax, social security and state taxes are still being deducted.
My understanding is that I can keep things the way they are, and then file my US taxes in April and then my Canadian taxes afterwards, and obviously, I'll owe income tax to Canada.
Is this correct?
Canadian PR Living in Canada Working for US Company
Moderator: Mark T Serbinski CA CPA
Technically, if you live and work in canada, you should either be on a Cdn payrol, or you should become a contractor.
It is not primarily an income tax issue, it is a payroll tax issue. Neither you nor your emplyer are correctly paying Cdn payroll taxed (EI and CPP) which is required for all employment performed on Cdn soil by CDn residents.
As to income tax, ALL of your tax should be paid to canada, since the work is Cdn-sourced, and then credit given in US, so you would get all the tax refunded from IRS, and have to pay all of it and then some to canada. This would be the case even if you had ben sent up to canada to work for six months or so, even more than you actualy live in canada.
The currency and destination of the funds you are paid is meaningless.
So, you need to get your employer to either create a Cdn payroll, or make you a contractor. this would actually benefit you, as the company (and thus you) are paying for fringe benefits that are of no use to you.
It is not primarily an income tax issue, it is a payroll tax issue. Neither you nor your emplyer are correctly paying Cdn payroll taxed (EI and CPP) which is required for all employment performed on Cdn soil by CDn residents.
As to income tax, ALL of your tax should be paid to canada, since the work is Cdn-sourced, and then credit given in US, so you would get all the tax refunded from IRS, and have to pay all of it and then some to canada. This would be the case even if you had ben sent up to canada to work for six months or so, even more than you actualy live in canada.
The currency and destination of the funds you are paid is meaningless.
So, you need to get your employer to either create a Cdn payroll, or make you a contractor. this would actually benefit you, as the company (and thus you) are paying for fringe benefits that are of no use to you.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
http://www.kpmg.com/Global/en/IssuesAnd ... anada.aspx
'Employers are required to report, withhold, and remit withholding tax for each of their employees unless a waiver of withholding tax has been issued by CRA. As a technical matter, even short business trips to Canada are subject to payroll withholding unless a waiver has been obtained. These requirements apply even if the employer is a US company that does not have a PE in Canada."
'Employers are required to report, withhold, and remit withholding tax for each of their employees unless a waiver of withholding tax has been issued by CRA. As a technical matter, even short business trips to Canada are subject to payroll withholding unless a waiver has been obtained. These requirements apply even if the employer is a US company that does not have a PE in Canada."
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing