Filing US tax as Non Resident

[nishu900]

I am filing US tax as a non resident as I stayed in US for just 40 days in 2022, the rest of the time I have worked for my US company from outside USA.
As I got my employment income from a US based company and my employer withheld the taxes from my payroll for the entire year.

Do I need to pay taxes to IRS for the full year or for the number of days I stayed in US (which is just 40 days)?

[nelsona]

You should only report the income on 1040NR for the days you worked in US. There is place to explain what you are doing.
Far Canada, you will report ALL the income and take credit for the tax you calculate on 1040NR, plus any state tax that you owe, plus your Medicare and social security withheld.

[nishu900]

Thanks Nelson for a quick reply.

I forgot to mention one thing that I worked on a TN visa. Doesn't the TN visa requirements states that the entire US source income to be taxed in USA first irrespective of whether it is perfomed within US or outside US ? Also I worked as an employee not a contractor, hence received W2.

[nelsona]

Your status does not matter, and there is no such reporting requirement for TN.
I knew you were an employee, since I said to claim all medicare and social security withheld, which would only be for employees.

You will explain why you are exempting income on your 1040NR.
And if the income for those 40 days was less that 10L US, you can exempt all of it, by treaty.

[nishu900]

Thanks for the reply.

What about the tax my employer has paid of his portion ? Isn't it a contradictory scenario where my employer has paid the taxes considered me as a resident and on the other hand I am claiming the exempt on my entire income as a Non Resident ? As on W2 employer also paid the taxes of his portion, will he also get the exemption on the same ?

[nelsona]

You are referring to payroll taxes: Medicare and SS. Employers don't pay other taxes on your wages, they forward what was withheld from you to the IRS and state.

If they wish to exempt themselves from their portion of Medicare and SS, they are free to do so. I'm addressing YOUR concerns, which are taken care of by claiming your portion of SS and Medicare premiums as foreign tax on your Cdn return.

The correct solution is to pay you as an empoyee of the place you live. Good luck with that.