Canadian working in the US short time - Exemption possible?
Moderator: Mark T Serbinski CA CPA
Canadian working in the US short time - Exemption possible?
Hello,
we are sending some employees helping our US entity. They will do 1-2 weeks at the time for 3-5 months. They will be paid by the US entity. I was doing some research and I want to confirm some information.
1)[b] CPP vs Social Security and Medicare tax:[/b] If we file and have an approved CPT-56, we will keep deducting CPP in Canada and won't have to pay SS and Medicare tax. Is that correct? Do we have to file anything else?
2) [b]Federal income tax:[/b] Is there any exemption possible for the US Federal Income tax even if the employee earns MORE than $10K and will be paid by a US entity? If positive, what is the form number. If not, to avoid the double tax do we have to file R-102 with CRA? And/or anything else?
3)[b]FUTA:[/b] Is there an exemption possible for the FUTA and keep paying the EI in Canada? If not, do they have to pay FUTA even if they reached the annual maximum in Canada?
4) [b]RRSP[/b]: Does the amount earned in US can be include in the calculation for the RRSP deduction limit?
Thank you,
Annie
we are sending some employees helping our US entity. They will do 1-2 weeks at the time for 3-5 months. They will be paid by the US entity. I was doing some research and I want to confirm some information.
1)[b] CPP vs Social Security and Medicare tax:[/b] If we file and have an approved CPT-56, we will keep deducting CPP in Canada and won't have to pay SS and Medicare tax. Is that correct? Do we have to file anything else?
2) [b]Federal income tax:[/b] Is there any exemption possible for the US Federal Income tax even if the employee earns MORE than $10K and will be paid by a US entity? If positive, what is the form number. If not, to avoid the double tax do we have to file R-102 with CRA? And/or anything else?
3)[b]FUTA:[/b] Is there an exemption possible for the FUTA and keep paying the EI in Canada? If not, do they have to pay FUTA even if they reached the annual maximum in Canada?
4) [b]RRSP[/b]: Does the amount earned in US can be include in the calculation for the RRSP deduction limit?
Thank you,
Annie
We think paying them with the Canadian company and charging our US entity for the Labor would be the easiest way.
What are the document that need to be file?
1. Do we still have to file a CPT-56?
2. Do we have to file something for the US Federal income tax for the exemption while working in the US?
3. Do we have to do anything with the FUTA or only paying EI on the Canadian side?
Do they still have to get a SSN-non resident and file US Tax and received a W-2?
Is there anything that could cause problem in this situation where they work for our US entity and get paid by our Canadian one. After our Canadian charge the US entity for the labor paid to the employee?
Thanks.
What are the document that need to be file?
1. Do we still have to file a CPT-56?
2. Do we have to file something for the US Federal income tax for the exemption while working in the US?
3. Do we have to do anything with the FUTA or only paying EI on the Canadian side?
Do they still have to get a SSN-non resident and file US Tax and received a W-2?
Is there anything that could cause problem in this situation where they work for our US entity and get paid by our Canadian one. After our Canadian charge the US entity for the labor paid to the employee?
Thanks.
1. no
2. No
3. No.
You are essentially sending him on a trips. There are no tax issues here.
You would ant to look into the immigration isues, whic also should not be a proble, and would have been an issue if he were being transfered to and paid by the US firm.
Why was this 'transfer' even considered? has you firm never sent an employee down to US?
2. No
3. No.
You are essentially sending him on a trips. There are no tax issues here.
You would ant to look into the immigration isues, whic also should not be a proble, and would have been an issue if he were being transfered to and paid by the US firm.
Why was this 'transfer' even considered? has you firm never sent an employee down to US?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
This is our US entity that have a job in the USA. We don't have enough hourly employees to cover the work than we will send Canadian employee to help out. They have a L1-B VISA.
This is why I'm wondering if paying them from the Canadian company and charging the US entity plus an Admin fee (if needed) will be a problem. The employees will be working in the USA and the USA might request their tax on the earnings made in the US from the Canadian employees.
We did send managers down sometimes but not hourly employee will work on a job and that the customer will be charged for their hours.
This is why I'm wondering if paying them from the Canadian company and charging the US entity plus an Admin fee (if needed) will be a problem. The employees will be working in the USA and the USA might request their tax on the earnings made in the US from the Canadian employees.
We did send managers down sometimes but not hourly employee will work on a job and that the customer will be charged for their hours.
If that agreement can assure us to continue paying our employees with our Canadian entity the way we actually do it without having any obligation on the US side that would really helpful. I'm really interested to have a look to this agreement. You can sent it to: annie.lesperance@dsitt.ca
Thank you.
Thank you.