Living and working US on TN visa, getting 50% of wages on W2 and 50% to Canadian corp

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reddy
Posts: 1
Joined: Mon Oct 05, 2020 10:12 pm

Living and working US on TN visa, getting 50% of wages on W2 and 50% to Canadian corp

Post by reddy » Mon Oct 05, 2020 10:20 pm

I am Living and working US on TN visa, I am getting paid on w2 with monthly tax deductions. Now Iam expecting second job (remote) in us with same employer but different client. Now my empoyer saying he pays the second job moeny to my canada incorporation for below reasons
1)to save taxes (SSN,medicare etc) and just pay incorporation taxes in canada
2)to make sure the salary is not getting doubled on pay stubs all of a sudden and avoid any future questions from CBP officer for TN renewal(doouble salary compare to previous offer)

Please suggets what are the implicatons if get paid to canada incorporation

cullen
Posts: 46
Joined: Sun Mar 27, 2005 1:34 am
Location: Greenville SC

Re: Living and working US on TN visa, getting 50% of wages on W2 and 50% to Canadian corp

Post by cullen » Wed Oct 07, 2020 9:06 am

You will run afoul of the permanent establishment rules and be taxable in the US on the CDN corp income if you are not careful with the number of days you are in the US
Joe

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

Re: Living and working US on TN visa, getting 50% of wages on W2 and 50% to Canadian corp

Post by nelsona » Thu Oct 08, 2020 12:08 pm

Since he lives in US, he will have to pay tax on that income regardless of PE or not.

The problem may arise in how you take that money from your corporation in canada. IRS does not necessarily accept dividends paid in Canada as dividends in US, and denies any foreign tax credit, soi there may be no way around double taxation. and if you leave it in the corporation ,you do not get favourable tax rate because it is no longer a Cdn-controlled private corp, CCPC.

And you must ffile US corp taxes as a foreign corp doing business in US.


It's never a good idea to have a Cdn corporation if you live in US. I would simply open a US corp and have them pay your US corp.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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