Green Card holder, US resident, Canadian employer
Moderator: Mark T Serbinski CA CPA
Green Card holder, US resident, Canadian employer
I am a Canadian citizen and while living and working in the US on an expatriate assignment for the last 5 years I have obtained a Green Card. My Canadian employer would like to repatriate me to the home office in Canada (in a border community). As I am relatively close to retirement (< 10 yrs) and have over 25 yrs with my employer (an excellent employer and I enjoy my job) I need to figure out a way to stay working with the Canadian employer but retain my Green Card status so that when I retire, I can pursue employment in the US and accumulate 10 yrs SS and Medicare credits (I plan to retire in the US). So what I was thinking is I would maintain a personal residence in the US and commute to work in Canada. I assume I would be liable for US federal and state taxes but not Canadian taxes. In Canada there would be income tax withheld as well as unemployment insurance (UI) and Canada Pension (CPP). The tax holdbacks would be recoverable in that they would be applied to my US tax return through the US-Canada tax treaties so that's OK. How about the UI and CPP? What happens to this? On the US side, what about Social Security and other holdbacks. The only other wrinkle is health care and I propose to purchase a private policy which would likely net out any tax advantages to living in the US. Comments?
You will be considered a Cdn employee (Cdn fed, prov, EI and CPP withheld).
In US, you will be a resident of your state, and thus liable for IRS and state tax on all income (you would be liable for IRS tax in any even by virtue of your GC).
So, you will be liable for Cdn tax, first, but only on the wages. you will then use any Cdn tax (plus EI and CPP) as a credit on your return.
The reslit will likely be full Cdn tax, no IRS tax on the wages, and state tax on everything, unless your state has a foreign tax credit/deduction policy (some border states do).
You will not pay SS on this income, nor get quartes. You are of course already entitled to SS becuase of your Cdn history, but you won't get SS quarters for medicare inless you wourk in US.
In US, you will be a resident of your state, and thus liable for IRS and state tax on all income (you would be liable for IRS tax in any even by virtue of your GC).
So, you will be liable for Cdn tax, first, but only on the wages. you will then use any Cdn tax (plus EI and CPP) as a credit on your return.
The reslit will likely be full Cdn tax, no IRS tax on the wages, and state tax on everything, unless your state has a foreign tax credit/deduction policy (some border states do).
You will not pay SS on this income, nor get quartes. You are of course already entitled to SS becuase of your Cdn history, but you won't get SS quarters for medicare inless you wourk in US.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best