Taxes/Payroll - Working in US/ Living in Windsor

[batra38383]

I am so glad I saw this discussion. I am planning to move to Vancouver from San Francisco area. I am thinking to fly out to San Francisco on Tuesdays and fly back to Vancouver on Thursdays. So practically I will be doing 2 days wfh, but still counting 6 days(Thursday, Friday, Saturday, Sunday, Monday and Tuesday) towards my Canada residency. I know this is not too great of a plan, but I simply am little far away from completely vesting in my current company, and I also don't wana loose our PR status in Canada.

So great tips on taxation. This is definitely a little complicated scenario for taxation for me, as I will need to have residence in both countries, so tie breaking rules might be a little harder to interpret.

Is anyone in the group in the same boat?

 

[canuck78]

I am so glad I saw this discussion. I am planning to move to Vancouver from San Francisco area. I am thinking to fly out to San Francisco on Tuesdays and fly back to Vancouver on Thursdays. So practically I will be doing 2 days wfh, but still counting 6 days(Thursday, Friday, Saturday, Sunday, Monday and Tuesday) towards my Canada residency. I know this is not too great of a plan, but I simply am little far away from completely vesting in my current company, and I also don't wana loose our PR status in Canada.

So great tips on taxation. This is definitely a little complicated scenario for taxation for me, as I will need to have residence in both countries, so tie breaking rules might be a little harder to interpret.

Is anyone in the group in the same boat?

You may run into issues with US if you are only coming into the US 3 days a week and saying you are living and working in the US on H1B. Will you have a residence in your name San Francisco as well?

 

[batra38383]

You may run into issues with US if you are only coming into the US 3 days a week and saying you are living and working in the US on H1B. Will you have a residence in your name San Francisco as well?

I have not figured that out yet. May be I will do airbnb, or maybe I will rent out a place. Do you think that will be an issue to maintain H1B status, or you are pointing out issues with resident status for tax purposes in US?

 

[canuck78]

I have not figured that out yet. May be I will do airbnb, or maybe I will rent out a place. Do you think that will be an issue to maintain H1B status, or you are pointing out issues with resident status for tax purposes in US?

No H1B requires to be a US resident. Have you discussed your plans with your employers.

 

[batra38383]

No H1B requires to be a US resident. Have you discussed your plans with your employers.

I have not yet. Will give them a heads up soon. But I did check other blogs where people are coming down to US for 3-4 days in a month and working remaining days remotely.
Example: https://www.canadavisa.com/canada-immigration-discussion-board/threads/work-remotely-from-canada-for-us-employer.97746/
Almost all of those say the same thing that it is perfectly legit to do so. It only has tax implications, but tie breaker rules in US-Canada treaty usually resolve those. But people still get paid on W2.

Anything that you know of?

 

[yashshah]

Hi, did you move to Canada?

I got my PR and have few questions:

If I live in Windsor and travel daily to Detroit on H1B, will that be ok to fulfill my Canadian PR and Citizenship requirement? How much time would it take at the border.

Also, does anyone have experience paying taxes across both countries?

Thanks!

 

[harirajmohan]

No H1B requires to be a US resident. Have you discussed your plans with your employers.

Its not required. There is no requirement to maintain residency in US to maintain H1/L1/TN status as long as people reenter US within a month to maintain the status.
Many in this forum are commuters who dont have any residency/place in US but on H1 for years. There is nothing we hide. My employer has Canadian address on payroll and my company files extension with Canadian address.

I have not yet. Will give them a heads up soon. But I did check other blogs where people are coming down to US for 3-4 days in a month and working remaining days remotely.
Example: https://www.canadavisa.com/canada-immigration-discussion-board/threads/work-remotely-from-canada-for-us-employer.97746/
Almost all of those say the same thing that it is perfectly legit to do so. It only has tax implications, but tie breaker rules in US-Canada treaty usually resolve those. But people still get paid on W2.

Anything that you know of?

H1 status: See above note.
Tax note: See below note.
https://www.canadavisa.com/canada-immigration-discussion-board/threads/working-remotely-from-canada-in-us-company-as-canadian-pr.558089/page-14#post-8403418

Hi, did you move to Canada?

I got my PR and have few questions:

If I live in Windsor and travel daily to Detroit on H1B, will that be ok to fulfill my Canadian PR and Citizenship requirement? How much time would it take at the border.

Also, does anyone have experience paying taxes across both countries?

Thanks!

See above notes.
Instead of reading some threads i am not sure why you are asking questions first.

 

[ustocanada49]

Its not required. There is no requirement to maintain residency in US to maintain H1/L1/TN status as long as people reenter US within a month to maintain the status.
Many in this forum are commuters who dont have any residency/place in US but on H1 for years. There is nothing we hide. My employer has Canadian address on payroll and my company files extension with Canadian address.


H1 status: See above note.
Tax note: See below note.
https://www.canadavisa.com/canada-immigration-discussion-board/threads/working-remotely-from-canada-in-us-company-as-canadian-pr.558089/page-14#post-8403418


See above notes.
Instead of reading some threads i am not sure why you are asking questions first.

Hi,
If your employer has Canadian address on file,. how are your taxes being deducted? Arent the taxes based on address on payroll? Like, which state your live in and which county you live in (some counties also have taxes in the US). How can they run a US payroll with a Canadian address?

 

[harirajmohan]

Hi,
1. If your employer has Canadian address on file,. how are your taxes being deducted?
2. Arent the taxes based on address on payroll? Like, which state your live in and which county you live in (some counties also have taxes in the US).
3. How can they run a US payroll with a Canadian address?

1. Taxes based on state and country one works in. Its based on tax agreement between 2 countries on which get preference in withholding tax.
2. Not necessarily based on your residence. One live in DE and works in NY. Do you see payroll tax based in DE or NY? Its based on (Reciprocal) Agreements. How come multi state work-residence is not a problem and only multi-country work-residence becomes a problem? it is simply not, if one actually uses the right tools(such as below) and follow the given rules.
3. Thats the employer's payroll software issue. Its nothing to do with rules and its the excuse given by some intelligent employers complaining about not able to run payroll just because they need to enter US address in their software.
Its also the fear of some employers who dont want to pay and get advice from immigration lawyers & tax consultants instead they just simply reject the Canadian address to run payroll.
Another example: Many consultancies in US would wait till SSN is issued before they run payroll which even against the laws of work visa for not running payroll by employers just because not having SSN. This is not even known to many and until many years in the industry and not many employers even now not ready to actually get right software(or actually read to listen to immigration lawyers on rules).

 

[deepak_kh3]

1. File US return. Check the tax amount you need to pay in Canadian tax sites such as ufile.ca/simpletax.ca. For first year, you might not be owing anything as you are resident for just 2 months. If owing 0, then submit tax return for Canada. Mostly for first year there wont be any audit.
2. its fine. YOu can file and they will ask for more document if required. its not mandatory to send the additional documents during the filing.
3. Yes but after they ask for it. Not everyone is audited. They will send a letter asking for it.
4. W2 will have that hence thats enough.
5. I am yet to see which document they accept as i did not send the original w2(or 401k account deposits). They asked like "You did not send us an official receipt or a copy of information slip". I assume that the statement of deposit from 401k site is enough but not sure. I am still researching and experimenting on it. I will know this year if they accept the original w2 and copy of 401k account deposits which i sent last week.

hi,

I have a quick question - if you are working in US, how will you have a W2?

please help reply this question.

thanks

 

[harirajmohan]

hi,

I have a quick question - if you are working in US, how will you have a W2?

please help reply this question.

thanks

I am not getting what you are saying. Not sure if it answers you question but here is my answer:
I get the W2 mailed to Canada address. I can also get the copy of W2 from the internal HR system in my company.
401k statement too get mailed to Canada address from Fidelity.

 

[mayple]

Since no-one replied, let me take first crack on this one. In 2015, I paid US taxes as non-resident and Canadian ones as resident. In 2016, I paid US taxes as resident and Canadian ones as non-resident.

1. Your US employer cannot deduct Canadian taxes if you are on US payroll. They will deduct US taxes. At the time of taxes filing, you will first file US returns as non-resident and once done you will file Canadian returns as resident. In Canadian taxes you will take credit for the taxes paid in USA, so you won't be double taxed.

Let's say you made 100k in US, your US taxes are 20k and Canadian taxes are 30k. You will pay 20k to US and then pay difference to Canada ( 30-20k = 10k).

2. No. You don't.

3. As a US non-resident, I don't think 401k and HSA would be available to you.

Can you explain point number 3? How is a person commuting daily to work to the US a non-resident for tax purposes? If the employer is taking out all taxes (state, federal, FICA etc.) then they ought to be matching 401k contributions so long as the employee themselves contribute. So it is up to the individual for them to decide whether or not they want to contribute to 401k, just like if they were to live and work in the US.

 

[mayple]

No H1B requires to be a US resident. Have you discussed your plans with your employers.

This is incorrect. You DO NOT need to be a "resident" in the US to maintain your H1b. Your H1b is maintained by ensuring you have a legitimate job offer, valid visa and valid documents every time you enter the US.

 

[canprofus]

Can you explain point number 3? How is a person commuting daily to work to the US a non-resident for tax purposes? If the employer is taking out all taxes (state, federal, FICA etc.) then they ought to be matching 401k contributions so long as the employee themselves contribute. So it is up to the individual for them to decide whether or not they want to contribute to 401k, just like if they were to live and work in the US.

401k is not an issue. You can have it. You can even be tax exempt for your contribution as it is recognized by US Canada tax treaty.

But as far as I researched, contribution to HSA is not allowed as non resident. I ended up choosing non high deductible plan for next year because my employer mandates HSA account if you have hdhp and they contribute some amount every year to it. I wasn't sure what kind of headaches it could give, so I just gave it up despite not making financial sense.

You can still use the amount you contributed anytime for medical reasons. The biggest problem in having accounts that you aren't supposed to have as non resident is that you won't get appropriate tax forms on year end which could complicate your tax filing situation.

 

[harirajmohan]

401k is not an issue. You can have it. You can even be tax exempt for your contribution as it is recognized by US Canada tax treaty.

But as far as I researched, contribution to HSA is not allowed as non resident. I ended up choosing non high deductible plan for next year because my employer mandates HSA account if you have hdhp and they contribute some amount every year to it. I wasn't sure what kind of headaches it could give, so I just gave it up despite not making financial sense.

You can still use the amount you contributed anytime for medical reasons. The biggest problem in having accounts that you aren't supposed to have as non resident is that you won't get appropriate tax forms on year end which could complicate your tax filing situation.

HSA: You are obligated to close all accounts when you move to Canada. All you need is to declare the income from the sources.
When you withdraw from hsa for non-medical then its taxable to US hence that comes as income for Canada as well, automatically.
HSA is no different than the savings account in the home/other country.