CDN PR live in CAN,work for CDN co.,CDN income,TN wrk in US

[guy_musician]

I've been told U.S. taxes do not apply if you are:

1. A Canadian Permanent Resident
2. Living in Canada
3. Working in the U.S. under a TN Visa
4. Permanently always reside in Canda
5. Have significant ties to Canada: bank accounts, passport, property, drivers livense, car registration, etc.
6. Have only informal social ties in the U.S.
7. Work for a Canadian Company, paid canadian $ in canada
8. Have no U.S. income

Firstly, is it true that U.S. taxes do not apply?

Secondly, would the answer change if you wanted to maintain that residency in Canada, but also stay in the U.S.A?

[nelsona]

May I ask how you are working on a TN visa in US, but still working for a Cdn compny?

In general though, you will have no US federal tax. You may have state tax to pay however.

[nelsona]

... as to your 2nd question, moving to US would make you taxable there ONLY, and your Cdn compny woud have to pay yo as a US employee.

[Bill_S]

How do you have a TN if you are a Permanent Resident of Canada (as opposed to a Canadian citizen)?

[nelsona]

Great point, didn't catch that one.

makes this post sound even more fishy....

[guy_musician]

Well, cancel the Canadian Permanent Resident comment.... permanently residing in Canada yes, but I meant to say Canadian Citizen of course. Therefore I have a TN Work Permit (they always remind people its not called a Visa at the border "its a work permit!")...

Lets suppose that one would like to move to the U.S.A., before moving, how should it be approached in the situation (as a Canadian Citizen), both from an employment point of view and a taxation point of view?

[guy_musician]

OK, so does anyone know the answer to the above question? Canadian Citizen being paid by Canadian Company, with property and residence in Canada? Currently based on your answer above, I shouldn't have to pay US Federal taxes.

Now what if I were to also have a residence in the USA, without changing anything else, would I still have to pay only Canadian Federal Taxes? I already have a work permit to work in the USA in general whenever required. Or would it be wiser to get a green card (not planning on becoming permanent US resident though)... ???

[nelsona]

If you reside in US ( especially if you are in US for more thamn 183 days in the calendar year), you will have to pay US taxes.

The residence is not that important, the physical presence in US is.

If you need more informatiopn, read the other posts on this site. You don't seenm to have a specific plan in mind.

[Bill_S]

Mr musician? It's difficult to help you when you aren't making any sense. First you mentioned a TN, now you claim to have "a work permit to work in the USA in general whenever required". That is not what a TN is. Then you ask about a green card, but don't want to be a permanent resident. Having a green card = permanent resident, unless you're talking about the so-called "commuter" green card. It would help if you would reveal exactly what you're up to. Where do you perform your work, and where do you want to live, and what exactly is your immigration status? The majority of Canadian TNs in the USA simply move south, take up residence in the US, and pay US taxes. Most try to minimize or eliminate CANADIAN ties so that they only have to pay in the US. You seem to want to do the opposite, which I find confusing. Having close ties with both countries might increase your tax burden and will complicate your filings.

[nelsona]

I'm glad to see I wasn't the only one scrathing their head on this one.

[guy_musician]

OK, there's nothing to hide, I'm just not explaining it very well... Let me try again: So I live in Canada, and sometimes commute across the border to american facilities when I go to work. Sometimes I work from home, and sometimes I have to work in Canada, visiting canadian facilities, so I'm not necessarily working every day in the states. In order to do ANY work in the USA, you are required to get some sort of permit/visa, so my company did the paperwork to get me a TN, so that I can cross whenever I need to so that I don't undergo delays because they would ask me whether I was doign any work in the USA.

OK, so that's cleared up. I'm paying Canadian taxes, because I'm still completely residence-affiliated in Canada. Now the next step is that I predict that I might have a little more work in the states coming up, so I would want to consider doing exactly what you suggest which is move to the USA, and declare American residency so that I pay american taxes.

Q1: Should I give up my Canadian Residency? What if I don't want to sell my properties in Canada?

Q2: Should I get a tax lawyer/tax accountant to help me with the transition? What forms would be required? Do I need to continue to file in both countries?

Q3: My car is registered in Ontario. Would that affect me? Would I have to pay duties to import my car (I heard that thats expensive)?

Q4: Should I apply for a Green Card or stay on the TN? I do plan on eventually returning to Canada. (if one year my TN doesn't get renewed, then

I hope that helps clarify the situation and my questions. I've tried reading about this situation, but I just still need some guidance, so I hope you can clarify what processes I need to go through to set it up. Sorry for the confusion and thanks for any info you can provide.

[nelsona]

You work for a Cdn employer, and usually in Canada, so your employment income will continue to be taxed in Canada. Breaking Cdn residency (which you can due to your TN) won't get you much. Remember, you TN is specific to your clients.

a1. Bill hit the nail on the head. You can do what you want to do, but you have to want to do it. you also have to find an american employer

a2. if you have a loose $1000 or so.

a3. There are no duties to import your car.

a4. You can get a green card. Only a US employer can sponsor you for a Green card. You don't have a US employer/sponsor.

In my opinion, the best tax situation for you is to remain resident in Canada, work in the US as much as possible (ie. in long periods of many months - but no more than 183 days in a calendar year), and then use the Overseas employment tax credit to reduce your Cdn tax.

[guy_musician]

Thanks... that helps a lot. That would be the ideal situation, but it might or might not work, hard to tell how much work in the states will be required still a year away. Hope you don't mind if I ask a few more hypotheticals:

I also looked into the OETC, and maybe I could use that for 2006, thanks!

b) what benefit is there to staying long periods of months in the states? Why not just commute across the border whenever I want?

c) What happens if I end up over 183 days for 2008? How do I know how many days they count?

d) Where could I find a good lawyer/accountant to work everything out for me? I'm willing to pay a few hundred to either if I need to.

Hopefully those questions make sense...
Guy

[nelsona]

Commuting prevents you from using OETC. OETC requires you being outside canada for long stretches.

Who is "they". You will most likely want to be taxed as a US resident (even if you are still Cdn resident), so number of days won't be important. Days are only important if you DON'T want to be taxed as a US resident.

The persaon who runs this website would be a start. A few hundred is probably underestimate for cross-border returns (at least the fisrt year).