Hello,
I'm a US/Canada dual citizen. I currently live in Quebec. I have an opportunity to do some work for a company based in Oregon and I'm curious if my understanding here is correct. All work would be performed remotely, in Quebec. I would be a contractor. Am I correct in thinking that I simply send a W-9 form (listing my SSN but also my Canadian address) to the company, then perform the work, billing and receiving payment in USD for simplicity. The total contract would be well under $30k CAD, so I don't think I would need to worry about GST or any sales taxes.
Question, how do I declare this income on my taxes? Canada side is quite straight-forward, I think -- it's income earned in Canada. What do I do on the US side?
Thanks in advance for any help or advice that might be available here.
Dual Citizen living in Canada, contracting for US firm
Moderator: Mark T Serbinski CA CPA
-
- Posts: 10
- Joined: Sat Mar 14, 2015 6:22 pm
- Location: Toronto
Re: Dual Citizen living in Canada, contracting for US firm
I'll leave the GST question to another.
Taxwise, as a USC, of course, you report all income worldwide on your 1040. This income, because it was performed in Canada, is Cdn sourced, so you can include it in your foreign earned income for form 2555, as self-employed income. You would be exempt from SE tax because you live in Canada. If the work was done in US it would be a little more complex, as it would be US sourced, but you could not claim the US tax on your CDn tax return, you would have to "re-source" that income to reduce the US tax to zero, on a 1116.
Taxwise, as a USC, of course, you report all income worldwide on your 1040. This income, because it was performed in Canada, is Cdn sourced, so you can include it in your foreign earned income for form 2555, as self-employed income. You would be exempt from SE tax because you live in Canada. If the work was done in US it would be a little more complex, as it would be US sourced, but you could not claim the US tax on your CDn tax return, you would have to "re-source" that income to reduce the US tax to zero, on a 1116.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
-
- Posts: 10
- Joined: Sat Mar 14, 2015 6:22 pm
- Location: Toronto
Re: Dual Citizen living in Canada, contracting for US firm
Thank you, Nelsona. Very helpful to get confirmation.
Re: Dual Citizen living in Canada, contracting for US firm
As for the GST TVQ side as long as your worldwide sales in the calendar year do not exceed $ 30K CND you do not need to worry about the GST TVQ which would be zero rated since the sales are originating from outside Canada. This of course assumes you will be reporting the income on your T1 and QC TP1 in 2018 and not through a corp which should be the same for GST TVQ but not for tax reporting.
JG
-
- Posts: 10
- Joined: Sat Mar 14, 2015 6:22 pm
- Location: Toronto
Re: Dual Citizen living in Canada, contracting for US firm
Hi JGCA, thanks for the reply. That confirms what I was thinking.