Canadian Temporary Resident - Employed by US company

ethannathan · Post by **ethannathan** » Fri Jan 30, 2009 3:15 pm

Nelsona -- we have corresponded in the past and would like your inputs on this.

We are in US on work visa from India. We will be moving to Canada as Temporary resident in a couple of months (We may become permanent resident in a couple of years).

My wife's US workpermit is valid till end of 2010. Her US employer is ready to let her work remotely from Canada. That means, she will be still listed on US employer's payroll and salary gets deposited in a bank in US.

I checked with an immigration attorney, he said this does not violate any immigration laws.

My question to you is:

1. What are the tax implications?
2. I assume she should continue to file US tax since she will be receiving US W2. Please confirm?
3. I assume since she is living in Canadian soil, she should be paying tax in Canada too.
4. Since we are temporary residents of US as well as Canada are we going to be double taxed and left with nothing?

Your inputs and other forum visitors inputs will help to decide the next steps. Thanks.

nelsona · Post by **nelsona** » Fri Jan 30, 2009 11:03 pm

Did you check with a Canadian immig atty? That is the main concern, since you will be in Canada.

There is no tax liability in US, since she is not an employee in US. Should must be put on Cdn payroll, or paid asa contractor.

You will become tax residents of Canada the moment you move until you leave, regardless of your Cdn immig status.

ethannathan · Post by **ethannathan** » Sat Jan 31, 2009 11:38 am

Yes, I did check with an Canadian immigration attny. He said that this does not violate either Canadian or US immigration laws since she has valid work permit for US till end of 2010.

She will live in Canada but employed in US Company the one she currently working for, this company does not have any branch office in Canada. They will continue to pay her as if she is working from home as a remote employee. They will just change her residence/ communication address to Canada address

Her salary will be deposited in her US bank account.

Do you think someone is missing something here? If you think I have facts right, please advice on tax implication stand point.

Thanks for your attention.

nelsona · Post by **nelsona** » Sat Jan 31, 2009 12:49 pm

Yes, tehre is something missing: her home is in canada, thus he is a Cdn employee, and both firm and her need to have Cdn tax and payroll taxes withheld.

She doesn't need a US visa to do this work, 100's of Cdns work for US companies. But they are treated as Cdn employess, and they have the right to work in canada. your wife doesn't.

ethannathan · Post by **ethannathan** » Sun Feb 01, 2009 10:50 am

I see what you are saying. I will have to ask her to drill her employer/ HR for more information on this then.

She will have an open Canadian work permit thus eligible to work for any Canadian employer.

I will seek your advice as soon as I have more information on this.

Thanks for your valuable inputs.

nelsona · Post by **nelsona** » Sun Feb 01, 2009 2:16 pm

Ah, from an immig standpoint she should be fine -- you kinda left out the impotant detail about her Cdn permit, eh.

But from tax piint of view she will need to either become an employee on Cdn payroll (the company does not have to become Cdn, just teh payroll), or become a contractor.