Tax Help. Live in Alberta, work for U.S company

CanOiler · Post by **CanOiler** » Wed Dec 09, 2009 1:36 pm

Hello,

I know there are few other posts on this but I believe my situation is a bit different. I will be employed by a US company effective 2010. I will still keep residing in Canada (I'm a permanent resident) but my job involves lots of traveling. Basically, I will be working 1 month (in the US or somewhere around the world) and then I'll be off 30 days (staying in Canada). I wonder how should I fill out my Tax return?

Any help would be greatly appreciated

nelsona · Post by **nelsona** » Wed Dec 09, 2009 1:57 pm

Will you be salaried or contractor.

For Cdn purposes, this does not matter, as you will continue to report world income to canada, as an Alberta resident.

CanOiler · Post by **CanOiler** » Wed Dec 09, 2009 2:04 pm

Hello nelsona, thanks for your quick reply. I will be salaried.
Also, I'll be receiving bonus and per diem when on my 30-days work shift. I was told that this is not taxable in US but I wonder if it'll be in Canada.

All this would be much easier if I just move to the US but I want to keep my canadian residence status.

nelsona · Post by **nelsona** » Wed Dec 09, 2009 2:17 pm

Likely all your salary is taxable in US. Once you pay your IRS and state tax, you can use this (and SS and Medicare) on your Cdn tax return. the only portion that *might* not be is any tha tis earned while working in canada. But no need to complicate matters.

You can contribute to 401(k) if you wish, it will be deductible in Canada.

I have no idea if the other places you work will want their share, that I'll leave for you and your firm to decide.

Moving to US, for upto 3 years would not impact your PR status in canada, and you could avoid any Cdn tax -- although I think you will find the Cdn tax minimal. But you will have the cost of maintaining your residence in canada.

CanOiler · Post by **CanOiler** » Wed Dec 09, 2009 4:36 pm

Then I would have to report everything as foreign income..
According to my future HR, I will be receiving some US tax-free money, such as "per-diem" for every day I work abroad.. will I have to declare and pay Canadian taxes on this income?
Also, how is the 401(k) deductible in Canada?, according to CRA I need to report it as income...
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... n-eng.html

On the other hand, if I decide to move to the US for 3 years period. How can I ensure I won't be paying Canadian taxes?. I believe I have to declare myself as "non-resident", but how difficult is this (I dont have dependants, dont owe a house and would sell car before leaving)?.
Would I need to fill tax return each year of those 3 years?
Would I have to pay taxes on my return?
Would it affect my PR status (considering I will come back after 3 years to complete my 2 yrs requirement before my PR expires)?

Thanks for all your help

nelsona · Post by **nelsona** » Wed Dec 09, 2009 5:37 pm

You would have to declare the per diem as income, and then hopefully expense some of it, if the employer helps you, which is sone times difficult.

Without a family in canada, it is as simple as getting a place in US and living there, this is sufficient in declaring non-residency.

401(k) is deductible beginning in 2009. New treaty rule.

You file a 'departure' return, for the year you leave, and that is it until you re-establish Cdn ties. No tax.

See the "emigrants" guide from CRA.

Cdn PRs are no longer required to be tax resident to keep their PR alive. merely the required days 730 in every 5 year period.

CanOiler · Post by **CanOiler** » Wed Dec 09, 2009 6:20 pm

Thanks a lot for your help!