Moving to US on L2 visa (work remotely for my canadian co)

[April]

Hello,

We are moving to the US this summer. My husband has an L1 and I can get and L2. My canadian company is allowing me to work remotely (work from home). My question is, is this possible legally and what would be the tax implications in staying in Canadian payroll. Also, would I still need to get a work permit in the US and file taxes in the US, if this is the case?

There might be another option, which is to move me on the US payroll, but my company seem to think it's more complicated on their end.

Would appreciate your input.

Thanks,
Cherylene

[nelsona]

Once you get the EAD associated with your L2, you can work legally in US at whatever you want, including remotely for a Cdn firm, without restrictions. That should only take a couple of months.

In the meantime however, to work remotely for your old company (CanCo) while in US, you need to meet the following criteria: you can't be doing work for a US client of CanCo, CanCo shouldn't have offices in US (otherwise you need to transfer like hubby did) and neither you nor CanCo are "benefitting" from you being physically in US (you are availing yourself of resources that would only be available to you in US.
If you can meet these, you will have no problem working while waiting for your EAD. But do get your EAD in any event.

Now, from a tax point of view, you are becoming a US tax resident and a Cdn NON-resident, this Cdn job not withstanding, so CanCo, should be looking to pay you as a contractor or as a US employee at some point. Your primary tax will be US and your state, not Canada and province. So, if you don't fix this in the medium term, you will probably end up having lots of Cdn tax withheld, which will be refunded at tax time (when you file as an emigrant, and then non-resident), and owe lots of US tax at year end (which they will probably insist that you pay quarterly at some point.

Contractor would be best, but this may affect future benefits (like pension, current Cdn benefits like medical etc are useless in US)

[April]

Thank you so much for all the clarification nelsona, CanCo has offices in the US including HQ so they will have to transfer me.

[April]

Just a follow up question...in order for my company to move me to US payroll, I will need to wait for my EAD, can I still work for my company (remotely in the US) while waiting for the EAD? My understanding is it can take up to 90 days. I am hoping there will be no interruption in my work duties. We plan to move to US in August, can I apply for my L2 and EAD now and go back to Canada until my EAD is processed, or do I need to be in the US physically during processing of EAD?

Thanks

[nelsona]

Or make you a contractor.
Once you have your L2 EAD, you don't need the transfer, USCo could just hire you. The criteria I mention only apply during the short time you will not have an EAD.

keep in mind that once you transfer, USCo can just let you go, since they have no relationship with you. Unlike spouse, your transfer would not have been for a business need, it would have been done only to accommodate you, and they may have no business need for you down in US. At least CanCo knows you and has a measure of loyalty to you (by allowing you to telecommute).

I'd be tempted to either work as an employee for canco (after a break), or as a contractor for canco.

Just food for thought.

[April]

Thank you so much for your reply, to clear things up for me though, below are my options, the first one being best?

1. work for Canco as contractor, paid in CAD $, CanCo will not withold tax, I will pay my own US taxes
2. work for Canco an an employee (no changes to current status and benefits, ie paid in Cad $, CanCo witholds Can tax, cpp, etc. Then at tax season file US and CAD returns
3. transfer to US payroll (paid USD, receive US employee benefits, withold tax for US, but my primary duties would still be support/work for CanCo

Thanks

[nelsona]

1. the currency you are paid in is not important.
2. Yes, but realize that your PRIMARY tax will be to US, so unless you pay US throughout year, you will be penalized. Your Cdn return will be as a non-resident (possibly reporting NO income at all, and getting all Cdn tax back.)
3. Your transfer would be to the US firm (not a private payroll just for you), so the 2 firms would determine your duties.

[April]

Hello,

So we made the move to CT, USA and recently found out we're expecting (due in March 2018). I am working for CanCo (remotely), and still paid in CAD$ and paying Canaadian taxes. Based on what I read, I would still be eligible to file EI benefits, ie. maternity... Would it be best to keep Canadian residency for this year and next and keep OHIP and EI benefits or would that not be an option at all on an L2 visa?

Thanks

[nelsona]

You can only keep Cdn residency by actually living in Canada. Your US medical benefits should be covered by your spouse's work insurance. You would probably be entitled to mat benefits regardless of residency. Check with Service Canada on that.

[Jordanj]

I am in the exact same situation, so thank you for posting this! Just wanted to follow up, were you able to get EI Maternity benefits from working for a Canadian company remotely while living in the U.S.?