Canadian working in the US

[Macnrayna]

**I understand that similar posts exist, I have read all of the ones that might apply, but can't find this exact situation. I am a bit worried about taxes so some advice/clarification would be very much appreciated!**

I am currently working for a Canadian employer, paid a Canadian salary, with my home and my assets and family are in Canada. I am however, performing some of my duties in the USA. Last year I worked around 160 days on US soil, paid from a Canadian company in Candain dollars, etc. This year (2008) I most likely will exceed 183 days in the USA.

1. With TN status will I need to worry about paying US taxes at all?

2. What exactly does TN status give me or do for me?
(I have spent hours searching for this but can't find much defining the status itself, my best guess... it protects my Canadian residency.)

3. What happens if I exceed 183 days with a TN? Will my residency change- even though I intend on keeping my Canadian ties? Will I be liable for US Taxes, etc?

4. With a TN does the Substantial Presence Test apply to me?

5. If the Substantial Presence Test does not apply- when counting my days in the USA do I count travel/commuting days or are they still exempt (as they are with the SP test?)

Thank You this is very much appreciated.

[nelsona]

Tn is an immigration status, having no bearing on tax matters, other than it does NOT allow you to exclude your days in US in that status for the presence test.

In your case, the SPT does not really apply to you, since you remain a Cdn resident. However the the 183 days in US is the key: If you spend less than 183 days, you are not taxable by IRS (you may still be by state). If you spend more than 183 days, that portion earned while in US becomes taxable by IRS.

Note that the 183 in one calendar year is going away to be replaced by 183 days in any 12 month period, so time spent last year and this year can count towards your 183 day trigger.

[Macnrayna]

Thank you very very much.
So in summary, regardless of TN status I would be taxed in the USA if I worked more than 183 days in a current calandar year? Please confirm.

Secondly, when does the 12 month period rule come into effect and how is that different than a calandar year?

[nelsona]

Yes, even if you were b1, you would need to pay tax.

With the new protocol, the 183 days can occur in any 12-month period, so if you stayed 20 days in december 2007 and 170 days from jan to november of 2008, that would be 190 days in a 12 month period, you would be taxable in 2008, AND for the 20 days in 2007.

The protocol extends this beyond the single employee as weel, so if you were part of a team sent for one week in the year, while the rest of the team was there all year, your 1 week would be taxable in US.

In otherwords, going forward, unless you are on a short term project, expect to pay US tax on the portion you earn in US.

Your company will have to take care of this for you.

[Macnrayna]

Thanks again.
Where can I look to find out more information about these changes?

-M

[nelsona]

search the web for canada US tax protocol

[Macnrayna]

Thanks once again, this is very helpful information.
Where can I find information about the TN visa and what it does or does not provide? (Such as it having no bearing on tax matters, as I had heard it did?)

Are there any other visa options that might help?

Thanks