CDN resident working for US resident firm as an employee

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.

Moderator: Mark T Serbinski CA CPA

Post Reply
kenrousselle
Posts: 8
Joined: Tue Jul 26, 2016 8:40 am

CDN resident working for US resident firm as an employee

Post by kenrousselle »

Can anyone confirm that a CDN person working as an employee (not independent contractor) for a US resident firm (most work done in Canada, US and abroad), earning $50,000 US + and not spending more than 183 days in the US will continue to be subject to US source taxes and be able to claim a foreign tax credit on their Canadian return to offset US taxes?

In other words, there’s no way for them to reduce or eliminate US withholding taxes at source because the company is a resident of the US? And that they will only be able to offset taxes paid in Canada on their world-wide income with the taxes paid in the US?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Well, technically, the firm should set up a Cdn payroll for you, since, as a Cdn resident working in Canada, both the company and the employee are subject to Cdn payroll taxes (CPP, EI). I'll let CRA decide what to do with you on that.

But, given they do spend *some* time in US, you could argue that being paid on US payroll is plausible. As such, they are subject to US payroll taxes and withholding.

They will file a 1040NR in US (and state) calculating their IRS and state taxes, and use these plus Medicare and social security withholding as US foreign taxes, against your US wages only
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Post Reply