Working remotely from Canada while on a TN Visa

[2FarNorth]

Good morning - I’m a Canadian Citizen currently working on a TN-Visa in the US but planning to move back to Canada this fall as my wife is going back to school to get her Masters. In an ideal world, I’d like to stay on with my current employer as an employee and not a contractor but work remotely from Canada (architecture industry) while keeping my TN status. I want to keep my TN status in order to still attend client meetings in the US, visit job sites, office meetings, etc.

Besides submitting a W-8BEN form, what else do I need to be considering in regards to taxes and payroll? I’m trying to pitch this to them and make it as simple as possible but also need to be sure I am fully understanding the impacts and requirements from my side of things. I don't think we want to go through a PEO Agency and I would just have my paycheck deposited to my TD Cross Border account.

How complicated payroll wise is it to make this change mid-year? My boss seems to think it's going to be a big issue and he just received a PPP loan, so needs to keep me as an employee in order to keep the loan unless I quit - which I don't want to do.

Any help or insight would be appreciated!

[nelsona]

W8-BEN would have nothing to do with this situation, as there is no treaty provision that reduces any taxa for you in US.

Keeping a TN is not a problem, but being paid as a US employer while working and living in Canada is problematic from a payroll tax point of view.

Most in your situation MUST eithe have their firm set-up a Cdn payroll for you, or make you a contractor.

[2FarNorth]

But doesn't the Tax Treaty between Canada and the US ensure that I am not taxed by each of the two countries on the same income in the same tax year? And isn't the purpose of submitting the W8-BEN to confirm that I am not a US resident, that I am not working in the US and that I will report my income to the CRA?

The problem with my current employer making me a contractor is that they would run the risk of losing their PPP loan and I would also no longer be an employee, which in return would revoke my TN status for which I want to keep in order to be able to cross the border for meetings, etc.

[nelsona]

Form 8233 not W8-BEN is the correct form to use to determine if your wages are exempt from US tax. You will still need to file a 1040NR at year end to prove it. There are other circumstances than merely living in Canada that one would need to meet before the income would not be taxed in US, however.

A contractor living in Canada and crossing the border would still be eligible for (and would still need) a TN with your sponsor as a client rather than an employee. You would not lose your TN.

If your employer must keep you as a US employee for other reasons, then you should stay in US as a US employee.

Btw, there are many sources of income that require tax be paid in both countries -- wages are just one of them if you commute -- so your initial assumption is incorrect.

[2FarNorth]

So now I am leaning towards the Independent Contractor route instead of trying to remain as an employee on my TN visa, as I've been told that as soon as I move back to Canada my TN Visa is no longer valid. If I need to cross the border for a meeting, etc. I will look into the B1 visa.

I have a meeting this afternoon with a CPA / Immigration Lawyer, so hopefully that will shed some more light on the situation.

[nelsona]

Well, of course a TN remains when outside US, it is not needed when outside US but remains valid when re-entering US. Whoever told you this silly idea? They need to be (re)educated.

many TNers actually live full-time in Canada and COMMUTE to US every day/week/month as an employee. If you live in Canada and are not doing B2 work, you need a TN!

[2FarNorth]

That's what I thought - I'll be sure to tell them to give their head a shake! If I go to a independent contractor role with my firm, how complicated does the taxes get? Just trying to better understanding of the pros vs the cons with all of this.

[nelsona]

It would actually be simpler if you are a contractor, since you would not be taxed in US at all on this income. You would simply file a Cdn return.

[2FarNorth]

And then would I cross for meetings and site visits using my TN visa (as long as it is still valid) or would I need to cross for meetings using a B1? I had read that FAM makes it clear that B1 business visitors may not receive a salary or remuneration from an American source for services rendered in the US while on a B1 status.

[nelsona]

If you are a contractor, then YOU are paying YOU. the firm is paying your business, so could enter on TN or B1. If you are an employee, then, you would use the TN.

[skyfx]

nelsona wrote:
> Most in your situation MUST eithe have their firm set-up a Cdn payroll for you, or make you a contractor.

I work for a US employer that is trying to decide on the best path for hiring a Canadian citizen who wants to continue living in Canada. Based on what was written in this thread as well as elsewhere (e.g., https://forums.immigration.com/threads/ ... us.342982/), we are leaning towards hiring the individual ("service provider") as a contractor. Having said that, we have a few concerns:

1. We found a website (https://ogletree.com/insights-resources ... in-canada/) that states, "If ever a tax authority deems that the individual is in fact an employee, both the foreign entity and the individual can be subject to steep fines and penalties." Can anyone speak to this scenario? Specifically, under what scenario would they be considered an employee?

2. We found another website (https://www.deel.com/blog/hire-and-pay- ... -in-canada) that states, "According to the CRA, an independent contractor: ... Actively advertises their services—there’s proof (on LinkedIn or a personal website) that they’re self-employed and taking on work." Given that we intend to hire this individual / service provider to work for us full-time (40 hours/week), to what extent is he required to still advertise his services?

3. Historically, we (as an employer) report the geographic sources of our income as part of our financial reports. Does hiring this service provider create any related issues?

Appreciate your insights!