W2 employee living in Canada: basic questions

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
mancora
Posts: 3
Joined: Sun May 02, 2021 11:26 am

W2 employee living in Canada: basic questions

Post by mancora »

Hi there,

I am very happy that I have found this forum. I hope someone has some thoughts on my situation.

I am a Canadian permanent resident. I have no ties to the US nor did I spend any days in the US the last few years.

I got W2 contract on the table, the work will be performed 100% remotely.

The US company will withhold income tax and social securities.

My questions are:

A) Do I have to file a 1040NR?
B) Is there another document I have to file?
C) Can I offset 100% of the payed taxes on the Canadian side through FTC?
D) is there anything else I should be aware of?

I appreciate any answers!

Thank you!
nelsona
Posts: 17068
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: W2 employee living in Canada: basic questions

Post by nelsona »

They cannot pay you as a W-2, sicne you live and work in canada. They MUST either make you a contractor, or on a Cdn payrioll.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
mancora
Posts: 3
Joined: Sun May 02, 2021 11:26 am

Re: W2 employee living in Canada: basic questions

Post by mancora »

Thank you very much for your comment. That is a very interesting fact.

In one email my employer talks about contractor onboarding and a minute later I have a W2 contract with a hourly rate on the table.

So you are saying that this does not work at all?

Thank you sooo much!!
mancora
Posts: 3
Joined: Sun May 02, 2021 11:26 am

Re: W2 employee living in Canada: basic questions

Post by mancora »

Hi again,

I did a lot of research in this forum and I saw people who worked for an US based company from Canada (100% remote).

I am very confused now. What is the exact reason why this is not working? I found as reason: avoiding to pay Canadian payroll taxes

Appreciate your feedback
nelsona
Posts: 17068
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: W2 employee living in Canada: basic questions

Post by nelsona »

Yes, 1000's of Cdns work for US-based firms. They either work as a contractor, corp-to-corp, or are on a Cdn payroll.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
bluesky
Posts: 21
Joined: Sun Mar 29, 2020 11:01 am

Re: W2 employee living in Canada: basic questions

Post by bluesky »

My partner is in this position. She is paid by a payroll company in Canada (Manpower).
Post Reply