I am a US citizen and resident in New York State. I am considering a taking a job in Canada with a Canadian company. I would commute to Canada Sunday night or Monday morning, then drive home to the US Friday night or Saturday morning. I would have to rent an apartment in Canada. My wife and family would live in our home in New York State.
Would I only have to pay Canadian tax on my Canadian income only or on my world income?
What is the tax rate in Ontario?
Would I be covered/paying for by the Canadian health care system? What about coverage for my family?
I know if this becomes a serious offer I will need to consult a professional. I am just looking for some general information right now.
Thanks
Commuting to Canada
Moderator: Mark T Serbinski CA CPA
By getting a 'permanent' place to live, you are seting up sufficient ties in canada to be considered resident for tax purposes, if you wish. This would also get you (not your family) coverage under OHIP, since you would be spending considerable time in Canada (likely 200 nights per year).
You could then use the treaty to avoid paying Cdn tax on your non-Cdn income by invoking Article 4 residency tie-breakers which state that if you have a residence in both countries, your 'center of vital interests' would be your true tax residence. In your case, if your family remined in US, and you established little social ties in Canada other than your job, it would be the US.
The tax rates in Ontario and NY are equivalent. One thing though, is that you would probably have to pay NY state tax on your income, and I don't believe NY gives any foreign tax credit (i'll let you find out about that), so your taxrate might be considerably higher than if you lived and worked exclusivley in Ontario or exclusively in NY. this might make you want to consider yourself a true resident of canada, as this might lower your overall taxes, depending on your other sources of income.
You could then use the treaty to avoid paying Cdn tax on your non-Cdn income by invoking Article 4 residency tie-breakers which state that if you have a residence in both countries, your 'center of vital interests' would be your true tax residence. In your case, if your family remined in US, and you established little social ties in Canada other than your job, it would be the US.
The tax rates in Ontario and NY are equivalent. One thing though, is that you would probably have to pay NY state tax on your income, and I don't believe NY gives any foreign tax credit (i'll let you find out about that), so your taxrate might be considerably higher than if you lived and worked exclusivley in Ontario or exclusively in NY. this might make you want to consider yourself a true resident of canada, as this might lower your overall taxes, depending on your other sources of income.
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
NY does indeed give credit for taxes paid to a province on form 112-C. Note that this must be Ontario tax (calculated on a the Cdn federal tax return for residents of Ontario). If you decide to file as a Cdn non-resident by treaty, canada could make you fiel a non-resident return rather than an Ontario resident return, in which case you would pay a federal surtax which although equivalent to Ontario income tax, would not quealify for credit on your NY return.
This might be anotther reason to simply file as a resident of canada.
This might be anotther reason to simply file as a resident of canada.
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