Dual citizen living in US but contractor for Candian org.

ZoeMiles · Post by **ZoeMiles** » Mon Jan 27, 2014 3:50 pm

Hi,

I am a dual citizen, currently living in Canada and doing contract work for a Canadian organization. I am going to be moving to the US later this year, and I would like to continue with my current contract position. Will the organization legally be able to keep me on contract if I am working from another country? And would I have to file taxes in both countries, but only pay them in the US?

Any information is very much appreciated.

Thanks,
Zoe

nelsona · Post by **nelsona** » Mon Jan 27, 2014 4:13 pm

As long as you sufficiently sever residential ties in Canada, your contractor rtelationship with the firm will result in you only paying US tax after your move date.

You will be a departing Cdn resident, subject to Cdn departure tax requirements, and your regular US filing requirement.

ZoeMiles · Post by **ZoeMiles** » Mon Jan 27, 2014 4:38 pm

Thanks, that's great.

In terms of "sufficiently severing residential ties", where can I find more information about that? I will be returning in a few years, so some of my Canadian assets will remain during my time away.

Thanks again :)

nelsona · Post by **nelsona** » Tue Jan 28, 2014 11:47 am

If you live and work in US, and your spouse (if you have one) is with you, or if they live in canada but they visit you rather than you viist them, then Canada says you are non-resident of Canada.

ZoeMiles · Post by **ZoeMiles** » Tue Jan 28, 2014 2:04 pm

OK, so if I live in the US, work in the US (for a Canadian organization), and my spouse lives with me in the US, then it sounds like I should be fine

If I come up to Canada for an occasional short time to visit family or to run a short workshop, will that be a problem?

nelsona · Post by **nelsona** » Tue Jan 28, 2014 2:59 pm

Nope.

ZoeMiles · Post by **ZoeMiles** » Tue Jan 28, 2014 3:44 pm

Awesome, thank so much for your help on this. Do you know if there is somewhere that I can find the actual regulations, so that I can refer my client to them?

nelsona · Post by **nelsona** » Tue Jan 28, 2014 3:54 pm

Why are the asking?

ZoeMiles · Post by **ZoeMiles** » Tue Jan 28, 2014 4:49 pm

They aren't,but I want to be able to assure them that everything is fine, legally speaking.

nelsona · Post by **nelsona** » Tue Jan 28, 2014 5:16 pm

Again, what do you mean by "legal"? How are they going to pay you? Corp-to-corp?

ZoeMiles · Post by **ZoeMiles** » Tue Jan 28, 2014 6:23 pm

I am working as an independent contractor.

nelsona · Post by **nelsona** » Tue Jan 28, 2014 11:07 pm

http://www.cra-arc.gc.ca/E/pub/tp/ic75-6r2/README.html

Generally non-resident contractors, particularly long-term contractors, must have their client withhold 15% of the gross payment. Then at tax time, by proving that you are a US resident with no permanent establishment in Canada (by the treaty definitions), get all of the tax back.

The link I provided has a process for getting a waiver, but this may not apply to you.

nelsona · Post by **nelsona** » Tue Jan 28, 2014 11:07 pm

you may want to consider an LLC for yourself, to facilitate corp-to-corp payment and avoiding withholding altogether.