US Citizen wants to keep W2 remote job in Canada

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dwreckp
Posts: 3
Joined: Wed May 05, 2021 9:12 pm

US Citizen wants to keep W2 remote job in Canada

Post by dwreckp »

I'm a US citizen moving to Quebec and I want to keep my W2 remote job after I get Canadian PR status. I'd rather not attempt to go through the trouble of getting my US employer to set up Canadian payroll.

Are there any issues with CRA, IRS or any other government agencies if I try to continue as a W2 employee? Anything else I need to consider when filing taxes for both countries in this situation?

Thanks in advance!
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US Citizen wants to keep W2 remote job in Canada

Post by nelsona »

Yes, it is not acceptable to CRA. Work performed in canada by a Cdn employee MUST be paid either as a contractor or as a Cdn payroll employee.
It cannot be W2
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US Citizen wants to keep W2 remote job in Canada

Post by nelsona »

...Cdn resident employee...
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dwreckp
Posts: 3
Joined: Wed May 05, 2021 9:12 pm

Re: US Citizen wants to keep W2 remote job in Canada

Post by dwreckp »

Thanks for the reply! How about if I were to commute to the US to perform work, but I reside in Canada? Would that be allowed by CRA?
Bubba Gums
Posts: 54
Joined: Tue Jul 15, 2014 7:20 am

Re: US Citizen wants to keep W2 remote job in Canada

Post by Bubba Gums »

Ask your employer to provide a certificate of coverage?
https://www.ssa.gov/international/CoC_link.html

Would your employment duties in Canada give rise to a Permanent Establishment by virtue of your participation in a trade or business or concluding contracts etc? Would your activities be exempt under the various conditions in article V of the income tax treaty?

Delineate between your individual liability vs your employer's liability.
nelsona
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Location: Nowhere, man

Re: US Citizen wants to keep W2 remote job in Canada

Post by nelsona »

Commuting to US, like 100's do in Windsor alone, is normal and legal. You pay tax in US (and SS and Medicare), and canada gives credit for the tax you paid in US on your Cdn return.

The problem is LIVING and WORKING in Canada. CRA has made it very clear that this requires (in normal times, and if unaffected by COVID) Cdn payroll.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dwreckp
Posts: 3
Joined: Wed May 05, 2021 9:12 pm

Re: US Citizen wants to keep W2 remote job in Canada

Post by dwreckp »

That’s good to know. I didn’t know they allowed commuting but not remote work. Thanks again!
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Re: US Citizen wants to keep W2 remote job in Canada

Post by nirvana_1959 »

When you are commuting the work is performed in USA and hence subject to payroll taxes of USA.
Carasad
Posts: 17
Joined: Tue Dec 07, 2021 6:06 pm

Re: US Citizen wants to keep W2 remote job in Canada

Post by Carasad »

You can work remotely in Canada but keep in mind that you have to pay taxes to the Canadian state.
Sadased
Posts: 5
Joined: Tue Dec 07, 2021 6:08 pm

Re: US Citizen wants to keep W2 remote job in Canada

Post by Sadased »

You can work remotely in Canada but keep in mind that you have to pay taxes to the Canadian state. Besides, why would you want to move to live in Canada if you don't contribute with your own money? I moved to Canada a year ago and was working remotely at a US company at the time. I worked for another half a year, but after that, I gave up; I wanted something else to try. I was tempted to choose the floral designer job, where a good friend of mine also works. I applied for a 6-month course. You can check this website(https://www.becomeopedia.com/floral-designer/) to see details about this course, and I found a job that would please me.
zasdera
Posts: 2
Joined: Mon Feb 14, 2022 7:49 am

Re: US Citizen wants to keep W2 remote job in Canada

Post by zasdera »

What's W2?
Leecland
Posts: 1
Joined: Tue Feb 15, 2022 3:25 am

Re: US Citizen wants to keep W2 remote job in Canada

Post by Leecland »

I've been scrolling through the comments, and I think that you've got more or less the answer you were looking for. But if you still need some help to figure the issue out, I'm here to help. By the way, may I ask how it is to be a W2 employee? I'm currently working as a 1099 employee, but I've got an opportunity to switch to W2. Should I? Will I have enough freedom? Also, if anyone here has got some https://jobsandcareer.tips/phone-interview-tips/ interview tips they could share with me, I would be more than grateful. Looking forward to hearing from you.
ND
Posts: 291
Joined: Thu Feb 21, 2013 5:28 pm

Re: US Citizen wants to keep W2 remote job in Canada

Post by ND »

BubbaGums comment has not been given enough attention: Delineate between your individual liability vs your employer's liability.

A Cdn tax resident can find and dandy (from employee's perspective) work physically only in Canada on a W-4. The 1040 will back out 100% of W-2 income and claim all income tax withholding as refund.

To obtain FICA refund, ask your USA employer to refund the erroneously withheld FICA taxes and if a W-2 was already issued, to give you a corrected Form W- 2c for that year. If your employer refuses to refund the taxes, you can file Form 843, Claim for Refund and Request for Abatement and IRS says it will refund the money to you. The IRS will then send a request to the employer to correct their social security and Medicare reporting and the employer will have to send you a corrected W2c. Thus, in order to avoid a notice from the IRS, it is actually in the employers' interest to refund the taxes paid to you. In addition, the employer will be able to claim the employer's share of the taxes from the IRS.

Report the entire W-2 to CRA on T1 and pay tax on it only to CRA.

Time your cash flow so that you get your IRS refund ASAP and pay CRA by 4-30 (of course CRA may ding you for estimated tax penalty).

Now, as far as your USA employer, they are violating CRA payroll obligations. How CRA can enforce this with a US corporation is a good question.

Explore sending a Canadian PEO (Professional Employer Organization) to your USA employer to pick up the tab for it to employ you in Canada on its behalf, as PEOs remotely employ workers in Canada for US and global companies.
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