Is US per diem rate tax-free in Canada?

kwirky0 · Post by **kwirky0** » Mon Sep 13, 2010 7:14 pm

My friend just got a temporal job offer in the US on a per diem contract. He is going to be away from home for one year. Is the per diem money also considered tax-free in Canada?

nelsona · Post by **nelsona** » Mon Sep 13, 2010 9:47 pm

kwirky0 · Post by **kwirky0** » Tue Sep 14, 2010 9:43 am

Can you explain why?

His family is still in Canada. Is he a resident or non-resident for tax purpose in the US for 2010 and 2011?

nelsona · Post by **nelsona** » Tue Sep 14, 2010 10:04 am

Per diem rules are very strict, both in US and especially in canada. Even in US per diem is often treated as taxable after the fact , since IRS sees thru these scams meant to avoid FICA tax.

It is doubtful that the US employer would satisfy all the CRA's criteria for tax-free per diem, thus it would need to be included in the employee's income.

Your friend is freee to do his own research of course.