Working for US affiliate if Canadian Company

wdngtt · Post by **wdngtt** » Sun Feb 15, 2015 10:11 am

In 2015, my Canadian company will be setting up an affiliate company in the US. At that time I will then be paid from the US entity but will travel between the Canadian office and US office throughout the year. It is possible I could spend more that 183 days of the year in Canada this first year even after that entity is opened and my pays come from them.

Background - I am a US citizen and have a home and family permanently residing in the US and I have rental house in Canada provided by the Canadian company that I stay at when there. At the moment I work for the Canadian company in Canada and will until the US affiliate is established.

Question: Once I am paid by the US affiliate will I only pay taxes in the US under this scenario or will I pay taxes in both locations depending on the time I spend in each?

nelsona · Post by **nelsona** » Sun Feb 15, 2015 11:40 am

You will pay in both. You will pay in US because of beingan American employee, no longer able to use 2555.
And will pay in Canada due to residence.

What will happen is that sourcing of the wages will be split, meaning that parts will get foreign tax credit in US and part will get foreign tax credit in Canada.

Not ideal situation. Make sure ypur firm agrees to cover the overage.

wdngtt · Post by **wdngtt** » Sun Feb 15, 2015 1:53 pm

Thanks for the prompt reply. Probably an obvious question but I presume then if I were to spend most of the year in the US and merely travel to the Canada office from time to time for meetings then I'd only pay US taxes? This means I do not maintain a residence.

nelsona · Post by **nelsona** » Sun Feb 15, 2015 2:06 pm

Then your family comes into play. Are they visiting you in US, or are you visiting them.

But, that is moot since you said you will be spending 1/2 your time in Canada, which makes breaking ties difficult.

wdngtt · Post by **wdngtt** » Sun Feb 15, 2015 2:13 pm

My family and everything is in the US. I have been working for the Canadian company just recently.

nelsona · Post by **nelsona** » Mon Feb 16, 2015 11:29 am

Ah, missed that. Scratch pretty much everything I said.

If you are in Canada less than 183 days in ANY rolling period, you should be fine without having to pay Cdn taxes.
I would strive to avoid the 183 days if possible.