TN extended remote work in Canada

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.

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jixca
Posts: 75
Joined: Wed Apr 06, 2016 9:12 am

Re: TN extended remote work in Canada

Post by jixca » Mon Jun 29, 2020 12:03 pm

After spending the weekend reading thru the non-resident return guide, I got a better understanding of the reporting requirements.

Basically, one reports the prorated US-wages to CRA and pay the federal and provincial taxes. The only difference with a resident return is not including other income like interest or capital gains. There's no CRA credit to claim so the sum of taxes to be paid is going to be large and will need to be plan/timed properly with IRS return with form 1116.

I was confused earlier when reading through the guide and assumed my US-wages are foreign, but for my case of exceeding 183 days while keeping non-residency, it's Canadian sourced income (as others, not on the foreign income section) in ufile and turbotax.

Now, I'm assuming I don't need to prepay the CRA taxes by installment right? While the estimate tax for 2020 can be up to 40k and exceeds the 3k limit for ON, I did not file for 2019/2018 and thus has not met both requirements per https://www.canada.ca/en/revenue-agency ... html#fctrs, after all, this is still up in the air and I may not exceed the 183/365 days in the end.

nelsona
Posts: 16456
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN extended remote work in Canada

Post by nelsona » Mon Jun 29, 2020 7:32 pm

Thanks for repeating what I told you a few times already.

As to making installments, you can make them if you wish. You may also want to increase your exemptions on your W-4 for the rest of the year, as you will grossly overpay your US taxes if the income "becomes" Cdn-source, eligible for 1116.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

jixca
Posts: 75
Joined: Wed Apr 06, 2016 9:12 am

Re: TN extended remote work in Canada

Post by jixca » Tue Jun 30, 2020 12:32 pm

I try to summarize the conclusion, for my own reference on steps to take next year in filing 2020 taxes, as well as to help anyone in the similar situation :)

I'm keeping track of the days present in Canada, and until I exceed that I probably wont' do anything. Afterwards, I'll have to calculate and possibly consider filing as resident of Canada if the benefits (health coverage, other credit or deductions) may overweight the cost (the hassle of declaring assets in 2020 for arriving/departing, and tracking market value of them)

nelsona
Posts: 16456
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN extended remote work in Canada

Post by nelsona » Tue Jun 30, 2020 4:44 pm

Remember, those 183 days accumulate between the first day you returned to canada -- until next year on same date. Sometimes, you can hit the 183 days in the next tax year, and have to back-file a return for the previous year. So be prepared for that.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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