US Citizen earning US income whilst in Canada

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chs
Posts:3
Joined:Thu Nov 05, 2020 10:42 am
US Citizen earning US income whilst in Canada

Post by chs » Thu Nov 05, 2020 10:48 am

Hi, folks, I tried searching the forum, but couldn't find a good answer for this. I'm a US citizen in Canada as a PR awaiting citizenship and have a job offer on the table for a role that's remote-based, but paid in the US in USD. I have a bank account and am current in all my taxes. I obviously want to stay above board on any taxes and had a few questions (These are all assuming I get paid in USD deposited in a US bank account and eventually transfer funds to Canada):

1) How do state taxes work if I'm not in the US but getting paid in USD to a US account? My last state of residence is NY; I left in 2012 to live abroad.
2) I assume I file my US taxes first, then file Canada taxes using the US taxes as a credit and then pay CRA/Quebec whatever balance is owed?
3) Any other gotchas?

Any help greatly appreciated! :)

Cheers
Christian

nelsona
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Re: US Citizen earning US income whilst in Canada

Post by nelsona » Thu Nov 05, 2020 4:27 pm

1. Since you are a USC, you need to report all income to IRS.
2. Since the income is earned while in Canafda - it is sourced in Canada, so you will be paying Cdn taxes FIRST, with credit given in US.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

chs
Posts:3
Joined:Thu Nov 05, 2020 10:42 am

Re: US Citizen earning US income whilst in Canada

Post by chs » Fri Nov 06, 2020 1:12 pm

Thank you, nelsona - very helpful! :)

What happens to state taxes, given I'm not resident in the US? I'm guessing/hoping that those aren't withheld, given I'm no longer a resident?

Cheers

nelsona
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Re: US Citizen earning US income whilst in Canada

Post by nelsona » Fri Nov 06, 2020 6:23 pm

Whether they are withheld or not will be a matter of your payroll department. They may find it simpler to withhold, unless you insist that they do not.

They should not however, but if they do you would need to go to your state return and claim it back as a refund.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

chs
Posts:3
Joined:Thu Nov 05, 2020 10:42 am

Re: US Citizen earning US income whilst in Canada

Post by chs » Mon Nov 09, 2020 10:53 am

nelsona wrote:
> Whether they are withheld or not will be a matter of your payroll
> department. They may find it simpler to withhold, unless you insist that
> they do not.
>
> They should not however, but if they do you would need to go to your state
> return and claim it back as a refund.

Many thanks, again, nelsona - that makes total sense.

amcquaid
Posts:5
Joined:Sat Dec 26, 2020 11:37 pm

Re: US Citizen earning US income whilst in Canada

Post by amcquaid » Sat Dec 26, 2020 11:55 pm

Wouldn't your company just convert you to Canadian payroll and pay you in Canadian Dollars? I would assume that there are legal issues for the company if they don't withhold local payroll taxes etc.

ND
Posts:173
Joined:Thu Feb 21, 2013 5:28 pm

Re: US Citizen earning US income whilst in Canada

Post by ND » Mon Jan 04, 2021 1:35 pm

Also Contact Marc Pavlopoulos marc@syndesus.com to explore PEO
Syndesus is an Employer of Record (also known as a PEO – Professional Employer Service) in Canada who legally employs Canadians in Canada to work for US companies.

Syndesus collects and remits all Canadian employer and employee taxes to the CRA. You would get an offer letter from Syndesus which exactly mirrors what you have in the US. Which means you get a T4, and that you are eligible for provincial healthcare (because you are now a Canadian taxpayer). The US employer pays the monthly fee for its service. There is no cost to the Canadian worker.

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