Spouse of a NAFTA Professional Work Permit Holder

[buffalobuffaloNY]

Hello All,

I am very new here so please bear with me as I learn the lingo

My wife and I live in Buffalo, NY and she (and I) are coming up to Toronto on her NAFTA Professional Work Permit. I will be getting an open spousal work permit from what I can gather.

I presently work in an engineering company in Buffalo, NY and after speaking with my team and management, they are open to having me work remotely. I would spend most of my time at my home office in Toronto and make occasional trips to Buffalo for meetings and the like. They are concerned that I must be employed by a Canadian company in order to continue to be able to work with them though? Can anyone confirm this -- would I be able to work remotely in Toronto for my US based company in Buffalo? Are there any tax implications?

Eventually, my wife and I would like to go for PR -- would I still be able to work as an employee for my US company? Is the tax situation difficult?

I can supply more details and clarification if needed, so please ask away!

 

[scylla]

You can work for them remotely. No issues. You'll need to file taxes both in the US and in Canada declaring your global income (one of the privileges of being a US citizen is that you have to file taxes for the rest of your life regardless where you're living and how long it's been since you've lived in the US). You won't be double taxed since any tax you pay in one country will be declared in your other return. My husband (American citizen) files his Canadian taxes first (tax rates are higher here), then files US taxes and declares the taxes he's already paid to Canada - and doesn't have to pay anything further to the US because he's already paid so much to Canada and that more than covers what he would owe the US. Overall, it's just a massive PITA from a paperwork perspective. Also, expect the amount of taxes you have to pay to increase. Otherwise no big deal.

 

[buffalobuffaloNY]

Thank you for the fast reply!

So there was some concern that since I would be living in Canada that I would need to work for a Canadian company -- is there anything to that ?

What happens if we eventually get PR?

 

[scylla]

No - you don't need to be working for a Canadian company.

Not sure I understand your question about applying for PR.

 

[buffalobuffaloNY]

Ok, thanks! I ask about the 'Canadian company' thing because some people at my Buffalo, NY company are asking how payroll taxes are handled. They still pay them right?

As for the Perm. Residency issue : Let's say in the future my wife and I apply for PR and get it - would I still be able to work as an employee for my Buffalo, NY company? I am in this scenario no longer a 'temporary resident' - how are taxes handled?

 

[scylla]

Your company can pay you out of Buffalo. Doesn't matter where that happens. You still declare the income both in your Canadian and US returns.

The situation won't change once you are a PR. You can still work for them and you'll still file taxes the same way. The only way you can stop filing two sets of taxes is if you stop being a resident of Canada (unlike the US, Canada doesn't obligate you to file taxes once you are a non-resident). Or you become a Canadian citizen and give up your US citizenship (extreme - but several people I know have done it). As long as you are a US citizen, you're filing US taxes for life regardless where you live. At least in Canada, you're not double taxed. Be happy you're not moving to NZ - then you'd be screwed from a tax standpoint.

 

[buffalobuffaloNY]

That's great info! Crazy to hear about NZ though!

I guess I will be filling two sets of taxes from now on -- the problem I am having is that my company seems clueless about how to go about this. They were the ones that mentioned that they would have to have a Canadian based company for me to work at (What would give them this idea?)

So I can continue to be paid payed by an American company, in American funds, to an American bank account either as a PR or as a temp. resident via my wife's open spouse work permit with no problems? Will my company continue to pay payroll and SS taxes?

 

[canuck_in_uk]

That's great info! Crazy to hear about NZ though!

I guess I will be filling two sets of taxes from now on -- the problem I am having is that my company seems clueless about how to go about this. They were the ones that mentioned that they would have to have a Canadian based company for me to work at (What would give them this idea?)

So I can continue to be paid payed by an American company, in American funds, to an American bank account either as a PR or as a temp. resident via my wife's open spouse work permit with no problems? Will my company continue to pay payroll and SS taxes?

Your American employer will continue to do everything exactly as they already do it. Nothing changes on their end.

 

[CDNPR2014]

That's great info! Crazy to hear about NZ though!

I guess I will be filling two sets of taxes from now on -- the problem I am having is that my company seems clueless about how to go about this. They were the ones that mentioned that they would have to have a Canadian based company for me to work at (What would give them this idea?)

So I can continue to be paid payed by an American company, in American funds, to an American bank account either as a PR or as a temp. resident via my wife's open spouse work permit with no problems? Will my company continue to pay payroll and SS taxes?

your american employer is assuming they need be responsible for paying canadian taxes, and they can't do that if they are not a canadian employer. perhaps this is where the confusion is. they do not need to become a canadian employer just because you are choosing to reside in canada and work in the us.

the truth is as scylla stated, the us employer continues to pay you normally as a us employee, regardless of where you reside. they will continue to deduct us taxes as normal. nothing changes. they are not responsible for deducting canadian taxes from your income. the responsibility for reporting your income to canada and paying canadian taxes is your responsibility, not your us employer's.

 

[buffalobuffaloNY]

Thank you all for the great replies!

I am learning a lot from all of this!

My companies HR Person is still having difficulty wrapping her head around all of this though. Even though my engineering group and managers are all on-board with everything, she still thinks that it is not possible for me to keep my US job while I am living in Canada. Is there any resource on the internet I can point her towards to alleviate her fears?

 

[CDNPR2014]

Thank you all for the great replies!

I am learning a lot from all of this!

My companies HR Person is still having difficulty wrapping her head around all of this though. Even though my engineering group and managers are all on-board with everything, she still thinks that it is not possible for me to keep my US job while I am living in Canada. Is there any resource on the internet I can point her towards to alleviate her fears?

I would ask her, how is this any different than the company paying for a remote worker? How is where you living any of their business? How does where you live affect their business? Your HR person sounds like she's meddling where she shouldn't be. Tell her you expect payment exactly the same way you get it now and i'd refer her to the local labor board if she had any questions of the legality of paying a us citizen for a job when they are residing permanently outside their state. If she needs a US address for payroll, then either use a family members or get a PO box.

 

[jes_ON]

Thank you all for the great replies!

I am learning a lot from all of this!

My companies HR Person is still having difficulty wrapping her head around all of this though. Even though my engineering group and managers are all on-board with everything, she still thinks that it is not possible for me to keep my US job while I am living in Canada. Is there any resource on the internet I can point her towards to alleviate her fears?

You are eligible to work in the USA by virtue of your American citizenship, which does not end just because you live in Canada.

Some websites:

http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/canadian-residents-working-us/

https://tax.thomsonreuters.com/blog/onesource/w-8-w-9/paying-foreign-employees-part-5-working-abroad/

https://www.irs.gov/individuals/international-taxpayers/persons-employed-abroad-by-a-u-s-person