TN Visa working in US on 1099

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mmadany
Posts: 6
Joined: Tue Jun 30, 2015 4:30 pm

TN Visa working in US on 1099

Post by mmadany » Wed Jan 30, 2019 12:50 pm

Hi,

I have researched this form quite a bit and learned a lot but still am confused about a couple of issues.

Here's my situation:
- Own the corporation out of Alberta, Canada
- The business gets paid from the US company. I do not get paid personally.
- Work in the US under a TN Visa
- Would be exceeding the 183 days substantial presence test in the US
- Belongings in Alberta: House and rental unit, vehicle, RRSP, TFSA.
- Spouse and dependents would be in Alberta for the first 6 months and then move to the US

Q. In my case, would it be better to close off the Canadian corp and open one in the US and switch all payments to the US corp?

Q. Would I be considered a resident of the US or Canada?

Thanks a lot for your help.

nelsona
Posts: 15525
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN Visa working in US on 1099

Post by nelsona » Wed Jan 30, 2019 2:06 pm

Until you move you are Cdn resident, and only if you exceed the 183 days in ANY 365 day period (not just calendar year) would that 1099 income for that entire period (but only that income) be taxable in US.
If you and family move to US, then you would want to use a US corp at that point, and would become taxable on world income in US, and ubject to departure tax in canada. You could do that now.
There would be tax considerations of winding down your CCPC at the point you become US resident.
Nelsona Non grata. Non pro. Search previous posts.

mmadany
Posts: 6
Joined: Tue Jun 30, 2015 4:30 pm

Re: TN Visa working in US on 1099

Post by mmadany » Wed Jan 30, 2019 3:48 pm

Hi Nelsona,

Thanks a lot for your quick reply.

So is there a reason why I would not just open the US corp from now and divert all my earnings to it?

Once my family moves to the US, I plan on filing the departure date (sever ties) like you suggested. Now what happens to my residential house and rental unit? Do I need to rent out my house so that I am not considered to have strong ties with Canada?

Maddy

nelsona
Posts: 15525
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN Visa working in US on 1099

Post by nelsona » Wed Jan 30, 2019 4:17 pm

I see no reason not to make the US corp now, since you will soon be a Cdn non-resident. This may need to be done carefully to mesh the income and taxes as you cross border.

As to house, no need to do anything. The treaty makes you US resident despite house. You will need to begin CRA tax withholding on your rental property. You will want a solid FMV on both when you leave, for future taxation/depreciation.
Nelsona Non grata. Non pro. Search previous posts.

mmadany
Posts: 6
Joined: Tue Jun 30, 2015 4:30 pm

Re: TN Visa working in US on 1099

Post by mmadany » Wed Jan 30, 2019 4:23 pm

OK. That makes sense.

Would it be wise if I open an LLC for the US corp?

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