Canadian PR living in Canada but working semi-remotely in US.

[cthought]

Hello everyone,
I am currently a PR living in Canada. I've had PR status for the past 2 years and up until this point have been working for a Canadian company. I now have a possible employment opportunity from a company in the US. They said they would allow me to work semi-remotely from Canada... basically working remotely most of the time and traveling to the US one or two weeks a month. I have two questions:

• Would the fact that I do not have a Canadian employer or the fact that my employer is in the US threaten my PR status as I prepare to apply for citizenship in the coming year or two?
• If this isn't an issue for my PR status, how would taxes work?

Thank you for anyone who could help with these issues. I am very grateful!

 

[scylla]

Your PR status will be fine provided you meet the residency requirement of physically living in Canada for 730 days out of every 5 years. To quality for citizenship, you will need to meet the 4 out of 6 year residency requirement (or 3 years out of 5 if the new bill passes). Working in the US 1-2 weeks each month will obviously delay your ability to qualify for citizenship. Also, the time you spend physically working in the US will not be counted towards either the PR or citizenship residency requirement.

You will declare all of your income (worldwide income) in your Canadian tax return.

 

[cthought]

Thank you so much for the information Scylla!

 

[dpenabill]

I largely agree with scylla except I am not sure about how the taxes will work. As a resident of Canada you will, of course, be required to file a Canadian resident tax return and report world-wide income. But as an employee of a business in the U.S. you will also be required to file a U.S. tax return. There are provisions in a Treaty between Canada and the U.S. that are reflected in the taxation rules for the respective countries which will mean you will not be double taxed . . . one way or another, you will get a deduction or credit in one country for the tax paid in the other. More than income tax is affected, as it also has an impact on other tax-related obligations such as CPP and U.S. Social Security contributions. But here too, you make the contributions in one country and are excused from making them in the other. But the way the actual rules apply to an individual can be complex, depending on the particular situation and circumstances and formal relationships. For example, I have long done work for a U.S. employer but since I do so pursuant to an independent contractor relationship, my place of business is where I do the work, here in Canada. So I pay taxes and CPP and so on in Canada, and my U.S. tax return is just an inconvenient imposition of paperwork (and this is more than a nominal amount of paperwork, enough to be an annual pain and expense) to prove I owe the U.S. nothing.

To put the absences (days in the U.S.) in perspective:
-- days in the U.S. will NOT count toward meeting either the PR Residency Obligation nor the physical presence requirements for citizenship
-- under current citizenship requirements, if you spend more than ten days a month in the U.S., averaged over years, you may never qualify for citizenship (technically a total 120 days absent a year would qualify, barely, but averaging a total 122 days a year outside Canada will fall short)
-- under the proposed citizenship requirements, in Bill C-6, you could average up to around 12 days a month abroad, and still (but barely) meet the citizenship requirements
-- to meet the PR RO, you will need to average at least 12 days a month in Canada, plus a few more days over the course of the year, to be in compliance with the PR RO

 

[cthought]

Thanks dpenabill!! It sheds a lot of light on the process for me. This is quite the convoluted tax set-up! I think I will have to talk to a lawyer before I make the decision to go with the US company. Regarding immigration, part of me thinks waiting till citizenship to work semi-remotely might be more prudent. Especially, if I have be in the US a lot of time and thus possibly keeping me from having the requisite residency days.

 

[H1B_140approved_CanadaPR]

If job is close to border.. It will make sense to commute often. I was in same situation and decided to take that job due to better salary ( a lot better).

Now I am commuting twice a week... I go on Monday and comeback on Tuesday.. go on Wednesday and come back on Friday. So only Thursday is not counted for my stay in Canada.

 

[keesio]

This is quite the convoluted tax set-up!

yeah, it can get very complicated. I strongly suggest going with an accountant who specializes in crossborder US/CDN taxes.

 

[cthought]

Thank you everyone! Looks like I'm going to have to talk to a financial advisor who specializes in cross-border taxation and to a lawyer who specializes in immigration issues.

If job is close to border.. It will make sense to commute often. I was in same situation and decided to take that job due to better salary ( a lot better).

Now I am commuting twice a week... I go on Monday and comeback on Tuesday.. go on Wednesday and come back on Friday. So only Thursday is not counted for my stay in Canada.

It's actually not on the border unfortunately. Otherwise, this would be a great solution.