Tax Implications for two full time jobs - 1 in Canada and other in USA

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pals
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Joined: Mon Aug 09, 2021 5:01 pm

Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by pals »

My Scenario-

I have 2 full time jobs one in Canada and other in USA
Currently in US ,getting paystubs with tax withold on W2.
In Canada, getting T4 as my regular paycheck as this job doesn't require my full time presence as I can do remotely.

I am a Canadian resident and do not want to loose the status as difficult to close my other source of income through investments, trading etc.

If I cross the 183 days threshold in USA, I know I will be resident over there but is it possible to file the US taxes as non resident and Canada taxes as resident through tax treaty.

What needs to be done, your help will be highly appreciated.
nelsona
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Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by nelsona »

You can't really choose to remain a CDn resident if MORE of your ties are in US. CRA will ultimately push you out, to get their share of taxes on your investments.

In any event, if you are living in Canada, you will need to pay Cdn taxes on ALL your income, and US taxes on your US income (unless you choose to also file a 1040 instead of a 1040NR).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
pals
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Joined: Mon Aug 09, 2021 5:01 pm

Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by pals »

Appreciate your reply.

Please provide your inputs for below -

1. As per the US/Canada tax treaty if one is able to prove his/her stronger ties with Canada in terms of primary residence, family, dependents, other assets, won't he/she be the resident of Canada even if he/she lives in USA for more then 183 days ? If this is true then which forms needs to be filled in order to prove his/her residency ?

2. If point 1 is not possible, then will be it be fine if one works in US for less than 183 days and maintains his Canadian residency with other source of income in Canada ?

3. Is it legal to work 2 full time jobs 1 in Canada and other in US(less than 183 days) as Canadian resident (assuming either of the job can be done remotely)?

Thanks in advance !!
nelsona
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Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by nelsona »

1, As I said, if you live in US you will be considered non-resident. That is the primary tie-breaker which defeats all others. NR73 should be consulted, but not sent in.
2. Yes.
3. Of course! As long as you have legal authorization to work at each job in each country (in your case, Cdn citizenship and US DHS authorization (ie. TN, H10b, greencard, EAD, etc).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
pals
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Joined: Mon Aug 09, 2021 5:01 pm

Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by pals »

Thanks Nelsona, I really appreciate your instant replies for clarifying the points. I just have the confusion with Point No 1.

As per the Canada/US tax treaty, below are the tie-breaker rules to identify one's residential status:

Each factor supersedes the subsequent factors i.e. once one of the determining
factors is met in assessing residency, the subsequent factors become irrelevant. The factors are
determined in the following order:

1. Location of your permanent home (whether owned or leased)
If, however, you have a home available to you in both countries, or in neither country, the
next factor comes into play.

2. Close personal and economic ties
Items considered here include the location of your investment accounts, where your credit
cards were issued, where your family and friends are located, what mailing address you use,
where you have your medical coverage, where your driver’s license was issued, the location
of your club memberships and religious affiliations, etc.

3. Your habitual abode
This test can be thought of as where you tend to be found or where you spend most of your
time.

4. Your citizenship

5. Competent authorities
This factor represents a last resort, where none of the above tests determine where you are
considered resident (either because either countries come out equally or neither country
seems to apply). In this situation, the Canadian and US governments are asked to jointly
determine an individual’s residency.

Now let's say , if one is in US for more than 183 days and at the same time he/she is fulfilling 1 and 2 points in terms of permanent home, family, dependents, investments, driver license then how come he/she is a resident of USA ?

Appreciate, if you can let me know if above rules are right or wrong ?

Thanks in Advance !!
nelsona
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Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by nelsona »

Just to clarify, the subsequent points don't supersede the pervious ones, if the previous ones aren't satisfied one way or the other.

Quoting me the treaty, which I'm very familiar with, without giving info about your situation, which I don't know anything about, is not very useful.

You can figure this out, with your situation. Just know that once you meet the IRS definition of resident (by SPT), CRA can decide unilaterally to treat you are a deemed non-resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
skobes
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Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by skobes »

> 1. As per the US/Canada tax treaty if one is able to prove his/her stronger ties with Canada in terms of primary residence, family, dependents, other assets, won't he/she be the resident of Canada even if he/she lives in USA for more then 183 days ?

Yes, the treaty tie-breaker provisions can be used to assert Canadian residence notwithstanding the US substantial presence test.

Note that this presumes you are a _factual resident_ of Canada under Canadian common law, independent of the treaty, on the basis of "residential ties" as described in Folio S5-F1-C1 para. 1.11-1.15. Usually, factual residency accompanies a physical presence in Canada, but it may also be established by maintaining a dwelling in Canada, having a spouse or children in Canada, etc.

The treaty tie-breakers only come into play if you are otherwise dual-resident. The treaty defers to US and Canadian domestic law unless there is a conflict between them. See Art. IV(1).

> If this is true then which forms needs to be filled in order to prove his/her residency ?

US: 1040-NR with Form 8833 for treaty position
Canada: T1, like any other factual resident
nelsona
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Re: Tax Implications for two full time jobs - 1 in Canada and other in USA

Post by nelsona »

Our poster never states that he has a permanent abode in Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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