I am a Canadian currently living in Canada. In about two months (September) I will be working in US on a TN visa. The team is fully remote so I have the option the stay in Canada if I want. I've heard people get a TN Visa and come back to Canada right after (or maybe stay just for a few days to set up SSN and payroll etc). I am curious how this would work if I were to do the same. Since I won't be a tax residence in US, how do I report US income tax for the US part? I think the Canadian part is clear, I'd just have to report them in CAD.
Another question is if I decide not to do this and go straight to the US, do I need to pay Canadian income tax on the income I earn in US (from Sept to Dec) if I have no significant tie to Canada from then on (non-residence)? How does the US determine which state tax residence I belong to? Is it based on my primary residence address when I enter US?
Thank you!
TN visa flagpole
Moderator: Mark T Serbinski CA CPA
Re: TN visa flagpole
If you remain a Cdn resident, working in canada, you should be on Cdn payroll, not US.
If you move to US, you become US tax resident at that time, ceasing Cdn tax obligations on US-sourced income.
US states tax both on residency and location of work, with work location having precedence. So, for example a person living in Vermont and working in New York would end up paying tax in NY on wages and Vt on everything, with Vt crediting the NY tax against the Vt tax.
Much the same as if you lived in canada and worked in Michigan.
If you move to US, you become US tax resident at that time, ceasing Cdn tax obligations on US-sourced income.
US states tax both on residency and location of work, with work location having precedence. So, for example a person living in Vermont and working in New York would end up paying tax in NY on wages and Vt on everything, with Vt crediting the NY tax against the Vt tax.
Much the same as if you lived in canada and worked in Michigan.
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Re: TN visa flagpole
At this date (7/15/21) if you do anything more than go to border to get TN, when returning to Canada, you will need to either fully vaccinated and have a recent COVID test, OR quarantine for 2 weeks.
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Re: TN visa flagpole
nelsona wrote:
> If you remain a Cdn resident, working in canada, you should be on Cdn
> payroll, not US.
>
> If you move to US, you become US tax resident at that time, ceasing Cdn tax
> obligations on US-sourced income.
>
> US states tax both on residency and location of work, with work location
> having precedence. So, for example a person living in Vermont and working
> in New York would end up paying tax in NY on wages and Vt on everything,
> with Vt crediting the NY tax against the Vt tax.
> Much the same as if you lived in canada and worked in Michigan.
Thank you nelsona, I think the first two points make sense. My understanding for the last one. If my work office is in California and I live and work in Washington remotely. I'd not have to pay CA tax since CA is not one of the seven states that apply the convenience rule. Am I missing something here?
> If you remain a Cdn resident, working in canada, you should be on Cdn
> payroll, not US.
>
> If you move to US, you become US tax resident at that time, ceasing Cdn tax
> obligations on US-sourced income.
>
> US states tax both on residency and location of work, with work location
> having precedence. So, for example a person living in Vermont and working
> in New York would end up paying tax in NY on wages and Vt on everything,
> with Vt crediting the NY tax against the Vt tax.
> Much the same as if you lived in canada and worked in Michigan.
Thank you nelsona, I think the first two points make sense. My understanding for the last one. If my work office is in California and I live and work in Washington remotely. I'd not have to pay CA tax since CA is not one of the seven states that apply the convenience rule. Am I missing something here?
Re: TN visa flagpole
nelsona wrote:
> At this date (7/15/21) if you do anything more than go to border to get TN,
> when returning to Canada, you will need to either fully vaccinated and have
> a recent COVID test, OR quarantine for 2 weeks.
Gotcha thanks for the reminder. I got fully vaccinated in Canada and I think a rapid COVID test is very easy to obtain in the US.
> At this date (7/15/21) if you do anything more than go to border to get TN,
> when returning to Canada, you will need to either fully vaccinated and have
> a recent COVID test, OR quarantine for 2 weeks.
Gotcha thanks for the reminder. I got fully vaccinated in Canada and I think a rapid COVID test is very easy to obtain in the US.
Re: TN visa flagpole
I guess just to be more clear. I plan to have my permanent residence in Washington, not California.
Re: TN visa flagpole
I don't look too deeply into state taxes, but nothing of what you say contradicts what I said: if you don't live or work in California, you won't pay tax there. but if you EITHER work OR live in cali, you would pay tax there.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing