Canadian in US on TN visa

tmc · Post by **tmc** » Thu Dec 01, 2016 10:07 am

I am a Canadian citizen working in the USA for an US employer on a TN1 visa e to as a Contract employee. My employer requires me to give them a completed W-8BEN form for each monthly salary. I do not pay any US taxes. I pay my Canadian taxes. Do I have to pay any US taxes?

nelsona · Post by **nelsona** » Thu Dec 01, 2016 10:45 am

As long as you do not spend more than 183 days in US in ANY 365-day period, you will not owe any US taxes on your contractor income.

You and your employer should really be using form 8233 instead of W-8BEN, although whatever works for your client.

Notice I use the word CLIENT to talk about your sponsor. If you are a contractor, you have a client, not an employer.

tmc · Post by **tmc** » Thu Dec 01, 2016 10:55 am

[quote="nelsona"]As long as you do not spend more than 183 days in US in ANY 365-day period, you will not owe any US taxes on your contractor income.

You and your employer should really be using form 8233 instead of W-8BEN, although whatever works for your client.

Notice I use the word CLIENT to talk about your sponsor. If you are a contractor, you have a client, not an employer.[/quote]

Thank you for the quick reply. I do spend more than 183 days in the USA. Also, do I need to get a SSN?

nelsona · Post by **nelsona** » Thu Dec 01, 2016 11:56 am

Then (a) yes you will be taxable in US on your US-sources contractor income (b) your client should be withholding from you, and (c) you will need, and are entitled to an SSN.

Are you remaining Cdn tax resident during this time? This affectes whether or not you pay Cdn taxes and whether you should pay US self-emplyemnt/social security tax or keep paying CPP.

tmc · Post by **tmc** » Thu Dec 01, 2016 12:18 pm

Yes, I am keeping my residency in Canada as I have family and property in Canada.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 12:27 pm

So you will also need a compliance letter from CRA which will allow you to avoid social security taxes (as a contractor, not as an employee) in US. You will continue to pay CPP in Canada.

tmc · Post by **tmc** » Thu Dec 01, 2016 12:51 pm

I do have a 'Contract of Employment' but am an employee by the fact that I work
under the general supervision, advice and direction of Employer and the Employer's supervisory personnel. Please advice.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 12:54 pm

So you will also need a compliance letter from CRA which will allow you to avoid social security taxes (as a contractor, not as an employee) in US. You will continue to pay CPP in Canada.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 12:56 pm

You are thinking about Cdn definitions. Essentially in US the manner of payment determines if you are employed: 1099 or W-2.
have they told you which it is? If it was W-2, they would have had you fill out a w-4 for wages, so I'm quite certain you are a contractor being paid under a 1099.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 12:58 pm

In either case, there is no need to have a w-8ben. You are subject to withholding.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 1:00 pm

In other words, let the person paying you decide if you are an employee or not. Once they have decided, which it seems they have, then act accordingly. CRA will accept what a foreign payor decides without question.

tmc · Post by **tmc** » Thu Dec 01, 2016 1:01 pm

Thank you Nelsona. I will check with my employer.

nelsona · Post by **nelsona** » Thu Dec 01, 2016 1:04 pm

Your sponsor.

Btw, if you are 1099, then you simply give them a w-9 and that absolves thenm of withholding (which seems to be their goal, and why they gave you a w-8ben to fill).

Then it is your responsibility to send about 1/4 of your gross revenue to IRS on a qiuarterly basis. You can start that next year.
Eitherway you need to get your SSN.

tmc · Post by **tmc** » Thu Jan 12, 2017 3:54 pm

[quote="nelsona"]Your sponsor.

Btw, if you are 1099, then you simply give them a w-9 and that absolves thenm of withholding (which seems to be their goal, and why they gave you a w-8ben to fill).

Then it is your responsibility to send about 1/4 of your gross revenue to IRS on a qiuarterly basis. You can start that next year.
Eitherway you need to get your SSN.[/quote]

I have applied for a SSN.
For 2016, will I need to submit a return to CRA for my income?
For 2016, will I need to submit a return to IRS for my income?

nelsona · Post by **nelsona** » Thu Jan 12, 2017 3:59 pm

Canada for sure. US as discussed above.