American Living in Canada as a PR - Married to a Canadian

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jdamico
Posts: 1
Joined: Tue Sep 16, 2014 3:29 pm
Location: Niagara Falls, Ontario

American Living in Canada as a PR - Married to a Canadian

Post by jdamico »

Hi, I'm still very new to this so I apologize in advance if I've missed similar threads (I tried to scroll through to search but there are a LOT of threads to go through) :)

I'm a US citizen now living in Canada (just recently got PR status) and I have an interesting situation since I'm a software consultant who works from home most of the time, unless I travel to customer sites (usually located in the US). My company is small and hasn't dealt with this situation yet, but they tell me that as of 1/1/15 they're going to move me to Canadian payroll. I don't think they fully understand from a tax and reporting standpoint what their responsibilities are, because they had just planned to "hire" me as a Canadian employee and just use my SIN number for Canadian tax purposes.

I have a few questions that I'm hoping someone can help me with, before I determine if I need to engage counsel for more thorough advice:

1) How -should- my company treat me in terms of employment? I'm a US citizen living in Canada, so should I remain on their US payroll? If yes, how do I handle Canada taxation and payroll taxes?

2) I'm very worried that I'm going to become broke very quickly paying double taxation. Am I expected to pay double taxation through every pay period until it's "tax time" and I can claim a huge refund? My heart is palpitating even now, typing this! :(

3) I continue to have a lot of financial responsibility that is US-based (student loans, etc) - has anyone ever been able to get paid partially in CAD and partially in USD? I feel like I've turned into a payroll and HR nightmare for my company. They are insisting that I be paid in CAD and that I be treated as a Canadian employee, which is fine I guess, I just need some advice as the currency conversion isn't exactly 1=1 and I don't know how other companies make their employees "whole" in this situation (example, if one made 50K USD every year and company switched EE to Canada payroll and gave them 50K CAD, obviously that's not the same and as the employee I'd expect some kind of "true up" on at least a quarterly basis to make up for the loss of income).

Any advice is very much appreciated. I feel very overwhelmed and over my head, and worried that the IRS and Canada Revenue is going to hunt me down.

In any case, I think I'll be finding someone to help me with my taxes for both countries, to ensure I don't end up in jail for doing it wrong! Ha!
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

1. No, they are correct to move you to a Cdn payroll. They handle payroll taxes (EI, UI) and withhold from your pay, along with Cdn tax.

2. You can no longer pay US taxes on your wages through payroll, nor will you have to pay at tax time either. You will report your wages on your1040, but will either exempt them using form 2555, or get taxcredit on form 1116. Few USC's living in canaf pay US tax.

3. This are minor details unrelated to your employemnt. Obviously you will be keeping a bank account in US and credit card. There are several simple ways to fiund that account and contiue paying any US obligations.

Since you live in canada, it really doesn't matter forma tax point of view how you are paid.: you WILL end up paying Cdn tax on all your income. Your wages are to be negociated, in Cdn dollars as prt of your move, and every year at review time. Nothing extra needs be done to account for currency conversion, etc. You simply ask for what you think you can get.

You are now a Cdn worker. The firm you work for just happens to have its head office in US, just like 1000's of other Cdn workers.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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