I'm a Canadian living in Canada and commuting to the US. The payroll department at my company seems to have no clue as to what they're doing with us Canadians (and I work for one of the big 4 accounting firms!). They constantly change how they're taxing us and I was wondering what are the actual rules for a US company when it comes to taxing their Canadian employees.
A couple of months ago, they increased the paycheque deduction for Canadian tax, since it was brought to their attention that they're supposed to be taxing us on gross income. How can pension (401k) deductions be taxable? When I do my income taxes at the end of the year, I convert my W2 (which shows earnings after pre-tax deductions) into Canadian dollars and submit that as my income to the CRA. It always gets reviewed and is always accepted by the CRA.
This week, they deducted 21% Canadian tax, in addition to deducting 21% of US taxes, plus social security and medicare taxes. I submited a letter to reduce taxes at source to the CRA that I then forwarded this to my emplyer (and I do this every year), so this shouldn't be happening..
Lastly, they announced couple of years ago that the US firms are now required to make CPP and EI contributions (employer portion) for their Canadian employees, and that they are also going to have to deduct the employee portion of the CPP and EI from our pay. However, the CPP pensionable earnings on my T4 (that they produced this past year in addition to the W2) was very small, about 4% of my total pay for the year. Same with the EI earnings. What does mean? I mean, what kind of EI benefits would I be eligible for, if any, if I only contributed $62 of EI premium for the whole year?
Income Tax Deduction in the US - Very Confused
Moderator: Mark T Serbinski CA CPA
-
UScommuter
- Posts: 1
- Joined: Thu Sep 15, 2011 9:23 pm
Why are they treating you like a "canadian" employeee. You work for a US firm in the US, so you are like 1000's of commuters who do this.
US employers of US employees have nothing to do with Cdn taxes. That is your responsibility.
Are they saying that you work for a Cdn employer and are a temp tansfer to their US office?
US employers of US employees have nothing to do with Cdn taxes. That is your responsibility.
Are they saying that you work for a Cdn employer and are a temp tansfer to their US office?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best