Working full-time in US & part-time in Canada

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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Dave777
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Joined: Sat Oct 20, 2012 12:55 pm

Working full-time in US & part-time in Canada

Post by Dave777 »

I'm a Canadian Citizen and will be moving to the US to work full-time at a US company. I will be establishing a home there etc. and will be sponsored for an H1 visa.

I will be retaining my home in Canada which my parents will adopt for their retirement and will be closing bank accounts, credit cards etc. as I will be a non-resident.

I have for the past 20 years had a part-time job in Canada that I would like to continue doing partly remotely and partly by coming to Canada for up to 20-25 days per year. The earnings from my part-time job are less than 10% of my full- time job so my primary economic interest is in the US. The part-time job comes with a public service pension hence my motivation to keep doing it.

Can I continue to work at my part-time job, and be considered a non-resident or deemed non-resident for CRA purposes? Would I only pay tax in Canada on the Canadian source income?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

It de[ends if the firm you are working fpr has any US connections, and if they benefit from you being in US. If not you can legally continue to work remotedly or in Canada for this firm.

They will need to pay you as a non-resident employee, and you will have to report the income in both US and 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
JGCA
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Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

If you are gong to be a non resident for a while you may want to transfer ownership to your parents of the home since its taxable on your departure return and may be tax free as your principal residence then if it goes to your parents who you say may be living in it they can deem it as their principle residence since it will no longer be eligible as your princ residence and will become taxable to you when sold, but this depends on how long you will be outside Canada and other factors but it may be worth to do it now.
JG
Dave777
Posts: 4
Joined: Sat Oct 20, 2012 12:55 pm

Post by Dave777 »

Thanks for the replies. Do I have a year after becoming a non-resident to sell my principle residence for the proceeds to be tax-free?
nelsona
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Location: Nowhere, man

Post by nelsona »

Yes, but only if you keep it empty.
if you rent it out, you must have CDn tax witheld every month, and you are making some of the home taxable, in both US and Canada.

JGCA is giving you an elegant solution to this problem.

Just to be clear however, the home would NOT be taxable in any event on the departure return, because it remains atxable Cdn property. One would need to elect to have it taxable (and of course, as principal residence tax-free) upon departure. Transferring to parents would not change the tax you owe up until departure (which would always be zero), but may make future tax simpler/eliminated.
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
JGCA
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Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

Yes the sale of the home since its TCP is not automatic you need to file form T2061A to elect this if you chose to do so.
JG
Dave777
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Joined: Sat Oct 20, 2012 12:55 pm

Post by Dave777 »

What if I keep my house in Canada and then return to Canada in 20 years and move back in to my house. Will the IRS tax me on the gain in value of Canadian house even though I have not sold it?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No. IRS only taxes at time of sale. So will canada, so the tax will balnce out.
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
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