Short term job in Canada while US resident

[peters]

I am a Canadian Citizen, currently non-resident - departed last year. I am a resident in the US on a H1 visa i.e. my residence and primary job is in the US. This year I filed for 2008, 1040 MFJ in the US and departure tax return in Canada.

But I have self employed job in Canada, where I go to Toronto once in a while on the weekends. All together it might be about 20hrs in a month. How would I file the tax (next year) for 2009?

[nelsona]

IF it is taxable in canada, you would report this as a non-resident of canada. Be sure to tell the people who pay you that you are non-resident, as they may have extra reporting to do -- apart from what your reporting/tax responsibilities are.


I say, IF it is taxable, because self-employed residents of the US are allowed to earn income in canada that would only be taxed in US. This would be the case unless you have a "permanent establishment" in canada.

Permanent establishment is generally considered an office/shop that you maintain, or, in some cases, if you only have a sole sole client who provides you a dedicated workspace/resources for your use.

Otherwise, the self-employed money you earn in canada is only taxable in US. You must report it on your 1040 regardless of how it is reported in canada.

[peters]

I know this is more of an immigration question rather than tax issue, but can I as a Canadian on H1B do a self employed job in Canada while tax resident in the US? H1B allows me to work in the US only for one employer. I think it should be fine since the self employed (or professional consulting) work is not done in the US.

[nelsona]

You can do anything you want in canada.