Canadian PR working for US based Company (Yes Again!)

[howardkoul]

Sorry for repeating a similar topic. But I've just went through all 72 pages and not one of the similar posts have a complete answer. So I'm going to ask it again in the hopes it can be answered 100%

Situation:
Company based 100% in the US (Boston) is looking to hire me as their only Canadian resource. So they presented me a offer that essentially is the same package they offer their US based employees. 120k Salary, Medical Benefits, 6% - 401k deducts.

I will be travelling to the US but the total number of days should be belong 183 days in the US and the rest of the time I will be working from my Canadian home.

They've asked me to get a TN and then get a SSN. So I understand I will be subject to US taxation and that amount will be deducted when I file my Canadian tax return.

My worry is when I file my Canadian tax return, will I have a large tax bill to pay in Canada? But again, how does that work when the income is happening in the US while I'm a Canadian PR?

Bonus question: 401k, does that have any merit given I'm in Canada? Should I get that striked off?

Note, Going the Canadian contractor way is not an option.

Thanks
-Howard!

[dvpower100]

howardkoul

I am in the exact same situation so once I get any clarity I will post back.

Thanks,

[howardkoul]

Just wanted to add I was able to get US benefits and 401k offer removed from my offer sheet. So I will be subject to MA state tax deduction only and then I will claim that amount as foreign tax credit on my Canadian tax return.

But I assume I still need to file a US tax return and Canadian tax return PLUS I would need to pay anything additional in Canada taxation wise correct??

[nelsona]

The credit in Canada will NOT be beased on your tax deducted/witheld, but on the final tax you pay, include fed, state and FICA.

[howardkoul]

[quote="nelsona"]The credit in Canada will NOT be beased on your tax deducted/witheld, but on the final tax you pay, include fed, state and FICA.[/quote]

Sorry but what does that mean?

I will be a Canadian PR working for a US based company with NO Canadian offices and I will be paid like a US employee based in the Boston and will be issued a W2 and no T3. So I will be paying US taxes even though I live in Canada and my total number of days in the US will be under 183 days.

So how does that work? Do I just file a Canadian tax return?

[nelsona]

You will file a US return and a Mass return. On these you will calculate your fanal fed and state tax.

This is what you will use on your Cdn return as a credit, along with your FICA, when you report your US income on your Cdn return. Its not the tax that is withheld every paycheck , since this is only an estimate of your final tax owed.

I can't make it any simpler than that.

[howardkoul]

[quote="nelsona"]You will file a US return and a Mass return. On these you will calculate your fanal fed and state tax.

This is what you will use on your Cdn return as a credit, along with your FICA, when you report your US income on your Cdn return. Its not the tax that is withheld every paycheck , since this is only an estimate of your final tax owed.

I can't make it any simpler than that.[/quote]

Thanks Nelsona! After reading various posts and online forums, the whole thing has gotten me a bit confused and I just needed it expressed in simpler terms.

Now if I can just find a firm that can help prepare my various tax returns.. :D

Many Thanks!

[howardkoul]

Just wanted to add a follow up.

I've been told that since my primary residence is Canada and I will not be in the US for more then 183 days. That I can file for US Federal, State Income tax exemption. Does anyone know what forms I need to fill out to get those exemptions?

For SSN/Medicare exemption, I can get a Certificate of coverage from the Canada government.

[nelsona]

This applies ONLY f you are not an employee of the US firm. There is no exemption for employment income.

[martinpruss]

My situation appears very similar, with some slight differences.

I am a US Citizen living and working in US. I am about to move to Canada to be with my spouse - I have Canadian PR status through marriage.

My company wants me to continue working for them - remotely - from Canada.

Can I continue to work as a W2 employee just as I am now (and like the original poster), or do I need to change and become a 1099 contractor?

Thanks so much for anyone who has the time to respond.

[nelsona]

You need to either switch to a Cdn payroll, or be a 1099 contractor. Citizenship does not matter: where you live and work does.

[martinpruss]

How is this different to the original poster? It seems you said it was on for him.

[nelsona]

There is no difference. I said there is a difference between employees and contractors. Choose the regime and you will choose your taxation.

[martinpruss]

So, I could remain an employee, but if I did that, they would have to pay Canadian style payroll? If they weren't willing to do that, I would have to become an IC. Did I get this right?

I don't see anything in the original posters comments (or responses) about the Canadian Payroll aspect of this - hence the question and query about the original response.

[nelsona]

Your first sentence is correct.

I typically don't parse previous responses, you said your situation was xyz, and I answered accordingly.

When someone says my situation is the same excpet for this, I answer about "this".