Canada PR Holder on H1B Visa working remote in Canada

[srinikrish]

Hey Srinikrish
I would really like to help you with this . I had same doubts as you had i found out this amazing tax website Maurice Morneau tax where they helped maybe you can reach them out. They are the best in Canada from 39 years

Thanks Nikhil!! How much is their Fee.?

 

[srinikrish]

read my previous post again.. you cannot do anything for state taxes. no credits for that.

t2209-20e form and t2036-20e for Provincial and territorial FTC's

 

[harirajmohan]

read my previous post again.. you cannot do anything for state taxes. no credits for that.

We get credit if you are willing to claim.

Thanks! That means i end up paying double taxes to the state..It's huge amount...But i spoke to some accountant and he says, we can take the credit for both the federal and state...Not sure, if he saying correctly..

Yes he is saying correctly.
https://www.canadavisa.com/canada-immigration-discussion-board/threads/taxes-payroll-working-in-us-living-in-windsor.551077/#post-6834715

 

[harirajmohan]

I am not sure why tax is a huge deal when thousands and thousands are dealing with US income. Please dont read too much and dont confuse others. Please be patient till you get your W2 and then you have plenty of time to figure it out. Your motive here is not to save tax - You are here to get your main problem solved - The immigration. I wonder why and how tax is big issue than retaining PR status(and citizenship). If so that they should have sorted out tax problem first and then filed for PR. Now you are derailing your own priorities and confusing others without knowing enough information.

Just move to Canada and things will be fine. Most never know what tax rate was before moving to US but we managed hence we can manage Canada tax too as million others have done it. People move without job and take any job they get with 30-50% cut in their salary. We should be happy to have US income hence tax is non-issue.

Tax filing is not a big deal. Hardly few thousand to be paid as tax if you are not willing to put some money in rrsp/401k (or no other expenses/exemption available)- its not a huge problem to make it appear as an impossible thing.

 

[Nick J]

Hello friends, came across this post as I was searching on this topic...I recently got a US job(on US payroll) transferring my H1B which allows me to live on Canadian side and work (mostly remotely and can commute into metro Detroit/US side for few days of the month while I reside in Windsor, ON). So I can maintain my Canada PR which I got almost 3 years ago.

So this cross border situation is very new to my employer and me too. I checked with MI state tax dept. and as non-US resident they don't need employer to deduct any state income tax it seems. Or if withheld they refund after filing non-resident return. So my employer blocked those although whatever deducted on first couple of paychecks they cannot refund.

But can you throw some light on social sec. and medicare taxes? When I called SSA helpline, they say if I do not reside in USA, I have choice whether to contribute to SS/medicare or not. If I move back to USA, I can always continue my tenure for SS they said and they keep count for any year worked before as i checked on my SSA account online. so given choice, I would want to stop contributing to SS/medicare when I am not in USA any more. But are there any obligations from US immigration perspective you may know about which need me to pay social sec. and medicare taxes?

For US federal tax I understand, employer must continue to deduct it on payroll. under US-Canada tax treaty I can file as tax resident for one and non-resident for other country, so the US income I have from my only job, will not get double taxed. Can someone confirm this please?

Your understanding or suggestions to this would be highly appreciated. Thanks!

 

[monglebest]

Ok - if your employer knows that you will be physically present in Canada the whole time you're working for them in the US payroll and they have no objection then I guess there isn't anything you can do.

Technically, there are guidelines from the Canadian revenue agency, the CRA, that requires that a non-resident employer (e.g. a US based employer) withhold and remit Canadian taxes to CRA (just like IRS expects US taxes be withheld for those employed in the US). This is a legal requirement under the tax treaty. It is an employer's obligation. And failing to meet this, they can be penalized by the CRA/Canadian government. Due to this, most established companies will not let you be on the US payroll (as a direct employee) and be fully remote in Canada. Hence, most people either transfer to a Canadian entity of the US company, or are employed through a PEO, or become independent contractors. Do you work for a large established organization? e.g. Microsoft, Apple, Google types? If you work for a small organization with only a US footprint, they may not be aware of these requirements. I work for a US headquartered international firm, and their lower level HR people did not know the answer to this either. I had to ask them 2-3 times, and they escalated internally to their legal/tax compliance department who then provided me with a detailed response.

The employee obligation (i.e. yours) is still the same - you file your Canadian taxes and declare your US income. If CRA pays attention and realizes that you were drawing income from US, but your US employer did not withhold and remit any taxes to them, they can take action.

Thanks for sharing this and I believe this is what I want to understand.

 

[missedTheGCBus]

Thanks for sharing this and I believe this is what I want to understand.

This is indeed true that your employer could be liable. In practice even if you work say 1/2 days week from Canada that means tax is owed to CRA from employee and employer. Though I don't know in practice how much it is enforced? I spoke with a few CPAs who said they don't see it enforced 90% of the time...