Canadian worked last year in US under TN Visa

[okshilato]

First of all I wish to thank in advance for anyone who’s helping me having an answer to my questions.

A little bit of history now just to describe the “big pictureâ€￾:
-I’m a Canadian citizen and I worked last year (2008) in US under TN Visa (CSA classification) for an US company; first time ever working in US.
-Based on TN Visa I’ve also get a US Social Security Number from the US Administration;
-I was hired by the US company on a corp-to-corp agreement as independent contractor (not incorporated) and NOT as an employee; I’m responsible for all tax payments in US and Canada;
- Working period was LESS than 6 months;
-The the US company wired the full amount of my services directly in my Canadian bank account and in exchange, I provided them with bills for every bank transaction.
- I was supporting by myself all expenses related to my contract in US: hotel, car rental, meal, local transportation and regular visits to my family in Canada (once per month);
-All this period my wife stayed and worked back home in Canada. Our child stayed home with my wife.
-At the end of the US contract, I come back home in Canada and give back the I-94 card at the US border; I never worked in US since;

Based on my contract terms (contractor an not employee) the US company wasn’t able to provide this year with a 1099 form and seems to me that they don’t know what form to release for my services, if there is any.
I’m ready to file my Canadian income tax for the year 2008, but I don’t know how to proceed with the revenue from US from IRS point of view in order to avoid double taxation.

Questions:
-Do I need to fill in an US income tax to IRS for year 2008?
-If yes, what form should I ask from the US company and what form should I fill in for IRS?
-On which income tax declaration I have to claim the NAFTA treaty between Ca-US in order to avoid double taxation: on Canadian income tax declaration or US income tax declaration?

Thank you in advance for you precious help…It's helpful for anybody using this valuable site.

[nelsona]

You are exempt form US federal tax, and since none was withheld, you have nio need to file any report.

In canada file just as if the payment had come from a Cdn client.

[okshilato]

Thank you NELSONA for your fast answer and for sharing with us your expertise.
I’m very grateful for your help.

The reason I posted my thread was the confusion in which IRS put me this morning. I call IRS this morning, before using this forum, and I spoke with an IRS officer about my situation as I described in this thread and he told me that I have to file in an US tax return and claim the treaty base position…which I have no idea how to apply it and on which form to use it.

What is your opinion on this?

I forgot to mention in my thread that the total billing to US company was bigger that 50K. Is that changing anything?

Thank you.

[nelsona]

As I said, since you had nothing withheld, I don't see the need to file a tax return, simply to indicate that you are not taxable.

You were not even paid with a 1099.


However, If you want to be extra safe, file a Form 8233 with THE COMPANY that contracted you, not the IRS. Let them deal with it after that. They should have provided you this in the first place. The Treaty article you provide is Article XIV.

But, as IRS Pub 519 explains, if you were not subject to withholding, and none was withheld, you do not need to file 1040NR.

[okshilato]

Thank you NELSONA for your answer…I’m very grateful for your help.

The US company they did put me to fill in the W8-BEN form, at the beginning, after I received the SSN from the US Administration.

In my case, since they didn’t pay me with a 1099, I’m assuming that was the wrong form.

What do you recommend to do in this case: To send them now the 8233 or just do nothing?

Thank you again.

[nelsona]

The W8 instructions clearly state that independent service providers should file an 8233 instead of a W8-ben. They should have known this.

Since at least something was in place with the company, it should be no problem to submit an 8233 to them now, as a backup.