Taxation of Canadian non-resident working in US for Canadian

lster · Post by **lster** » Tue Dec 16, 2014 1:07 pm

Hello, I am a Canadian citizen (non-resident) U.S. permanent resident married to a US citizen, and we live in the U.S where we pay our taxes married filing jointly. However, the company I work for (an international company - but I work for the Canadian arm) pays my taxes to the Canadian government. Do I file for a refund for these taxes and pay full taxes in the US or do I only pay the amount above and beyond our taxes. My husband puts us in a higher tax bracket in the US.

Thanks for the advise!

nelsona · Post by **nelsona** » Tue Dec 16, 2014 1:21 pm

Where are you physically working?

lster · Post by **lster** » Tue Dec 16, 2014 1:24 pm

Im working in the U.S. -

nelsona · Post by **nelsona** » Tue Dec 16, 2014 1:31 pm

So, the first question to ask is why you are having Cdn tax withheld. You are a US employee, so you should be having US taxes and social security being withheld. How long has this situation been going on? Did you move to US from Canada while working for this firm? Sounds like they were too lazy to change things when they should have.

You should be paying no tax to Canada. Period. You will need to get this back from CRA at taxa time, but you should be addressing this with the firm immediately, for the reason below.

Therefore all your taxation will be on your joint 1040. You will not be gwetting credit for Cdn tax paid or withheld (thus the need to get this fixed), and you will owe IRS, until you get this straightened out.

You also have Social security issues that need straighting out.

lster · Post by **lster** » Tue Dec 16, 2014 1:38 pm

I work virtually for a large International company for their Canadian arm - and they said they have to start doing this in January because the Canadian government requires it. So, not sure. I will ask them.

nelsona · Post by **nelsona** » Tue Dec 16, 2014 1:44 pm

You are not a Cdn employee. Are they treating you perhaps like a contractor?

Even then, since you are not performing work on Cdn soil, you are exempt from withholding.

Does this firm not have a US branch?

nelsona · Post by **nelsona** » Tue Dec 16, 2014 1:45 pm

If they are "starting" this in 2015, how are they handling it now?

nelsona · Post by **nelsona** » Tue Dec 16, 2014 3:19 pm

the problem for the firm is that they are not paying their share of FICA. You aren't either of course and that only hurts you, so they won't care about that.

But they need to be scared into doing the right thing by having it pointed out that they could be getting on wrong side of US govt, which ais a much bigger problem that making CRA mad.