What are my options?

[doogie414]

I have my own Canadian corporation and was on contract on TN from March 6th to Sept 16th on a corp-to-corp basis, so I have exhausted the magical 183 days in US for this 2006 calendar year.

I am now back in Canada. But my US client wants me back Oct 15th for a 1 year period. I still want to go corp-to-corp through my Canadian corporation and only pay taxes back in Canada. But do I not now have to be concerned about paying US taxes, FICA and all the rest because of the 183-day limit? Or is that only if I declare US residency and give up Canadian residency?

I had planned on opening an S-corp in the US and using that to go corp-to-corp with my US client, but non-residents can't opan an S-corp, can they? So is the best thing just to become a resident and do the S-corp thing? But then I have to prove to CRA I'm not a resident, right?

Anybody ever have to go through this, or am I best to set up an appointment with an accountant?

[nelsona]

The treaty allows for independent service who reside in canada providers to be exempt from US fed tax regardless of the number of days spent in US.

As long as you continue to meet the treaty definition of Cdn residency, and do not have a "fixed base" where you provide services in US, you are exempt from US fed tax.

State tax may be another issue, which you would need to determine locally.

The 183 days never applies to independent services (Article XIV). It is fixed base which is key, even for one day's income.

The 183 days applies more to dependent services as an employee (artilce XV)