Taxation on Canadian income as a US Permanent Resident?
Moderator: Mark T Serbinski CA CPA
Taxation on Canadian income as a US Permanent Resident?
I moved to the United States late last year and received my green card in February. I'd like to contract back to a company in Alberta, and as part of that need GST registration. As complicated as it seems to be I think I'm getting an understanding of how GST returns to Canada work, but I'm not 100% sure of how it will work when I go to do taxes next year. As a US resident I know they'll want to tax the contract but there is also the Canada - US tax treaty, which apparently prevents double taxation. Would I file a tax return to Canada first, and then in the US return and note as paid to Canada, or is there more to it than that? I'm trying to find information but there is a lot to navigate and I need to decide whether I take the contract soon. Thanks!
Much will depend on how much tim eyou spend in Canada.
If you spend less than 1/2 your time in Canada, none of the contract will be taxable in Canada, other wise it will all be.
It will all be taxable in US, in any event, and you will get credit for the Cdn tax on your US tax return.
If you spend less than 1/2 your time in Canada, none of the contract will be taxable in Canada, other wise it will all be.
It will all be taxable in US, in any event, and you will get credit for the Cdn tax on your US tax return.
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
I won't be spending any time in Canada - it'll all be through the internet/computer.
I don't have to file a return in Canada at all? I was told otherwise by a canadian accountant "As an Non Resident, you only need to report Canadian Income (no personal exemption for NR)" and that's what got me confused. It'd been difficult finding info I can be 100% sure of.
I don't have to file a return in Canada at all? I was told otherwise by a canadian accountant "As an Non Resident, you only need to report Canadian Income (no personal exemption for NR)" and that's what got me confused. It'd been difficult finding info I can be 100% sure of.
[quote="hevromero"]I won't be spending any time in Canada - it'll all be through the internet/computer.
I don't have to file a return in Canada at all? I was told otherwise by a canadian accountant "As an Non Resident, you only need to report Canadian Income (no personal exemption for NR)" and that's what got me confused. It'd been difficult finding info I can be 100% sure of.[/quote]
Since it appears that I can't edit my post, I'm going to note that the thing that got me concerned is that I do have to file a GST return to Canada, so I'm not sure if it would look strange if I didn't file a regular tax return even if I live in the USA.
I don't have to file a return in Canada at all? I was told otherwise by a canadian accountant "As an Non Resident, you only need to report Canadian Income (no personal exemption for NR)" and that's what got me confused. It'd been difficult finding info I can be 100% sure of.[/quote]
Since it appears that I can't edit my post, I'm going to note that the thing that got me concerned is that I do have to file a GST return to Canada, so I'm not sure if it would look strange if I didn't file a regular tax return even if I live in the USA.
This income would be considered taxable in Canada if your presence in Canada constituted a fixed-base. Obvioulsy it does not.
The acct described how you would be taxed as a non-resident employee, not as a contractor.
Now, if proper paperwork is not done, your client may have to withhold some money for taxes, but you woul -- at worst -- get this all back at tax time.
As to GST, non-residents pay GST all the time. It does not make their income taxable in Canada however.
Above all, regardless of whom you deal with, be clear that you are a US tax resident.
The acct described how you would be taxed as a non-resident employee, not as a contractor.
Now, if proper paperwork is not done, your client may have to withhold some money for taxes, but you woul -- at worst -- get this all back at tax time.
As to GST, non-residents pay GST all the time. It does not make their income taxable in Canada however.
Above all, regardless of whom you deal with, be clear that you are a US tax resident.
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