1042S - Foreign Persons U.S. Source Income s/t/w

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Moving2Canada
Posts: 15
Joined: Thu Jun 25, 2015 12:58 pm

1042S - Foreign Persons U.S. Source Income s/t/w

Post by Moving2Canada » Fri Aug 16, 2019 3:51 pm

I recently moved back to Canada for the U.S. I am now a self employed independent contractor with clients that are based in the U.S.

Do my clients pay me under form 1042S - Foreign Persons U.S. Source Income subject to withholding or a standard 1099?

If the 1042S, and there is a tax treaty between Canada/U.S. is my withholding effectively zero? (taxes to be paid in Canada and not when my client pays their invoice)

Thanks!

nelsona
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Re: 1042S - Foreign Persons U.S. Source Income s/t/w

Post by nelsona » Fri Aug 16, 2019 8:25 pm

Yes, it would be appropriate for your US clients to issue you a 1042-S for independent services (contractor) work done in US, and thus not withhold you.

However, while the treaty allows such work to not be subject to withholding, if you spend more than 183 days in any 365 day period in the US, your US-sourced income would become taxable, so keep track of these days.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Moving2Canada
Posts: 15
Joined: Thu Jun 25, 2015 12:58 pm

Re: 1042S - Foreign Persons U.S. Source Income s/t/w

Post by Moving2Canada » Tue Aug 20, 2019 2:56 pm

If I perform ALL of my work in Canada (sent via email and phone) to the US, does that change things? Would my client issue a 1042S or some other form?

Thank you

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