taxes while on work permit

[abedelia]

Please help, I am hopelessly confused!!

The facts: I am a US citizen. At the end of last year my husband and I moved to Quebec. I continued to work for my US employer remotely (will salary and benefits) from Quebec, and I was issued a visitor record. In March my husband and I put in an application for permanent residence for me, with him as my sponsor. My understanding has been that I'm a visitor in Canada and therefore not eligible for benefits (health cards) or responsible for paying taxes to Canada (I continue to pay taxes on my US income as if I live in the US). I've got a US address, receive mail there, have my car registered in the US, etc. When my PR is finally done and I land, I understand that I will have to pay, in total, the Canadian tax rate, first by paying my US taxes as usual and then by paying the difference to Canada. And I'll be eligible eventually for a health card, etc. Or that is what I understood anyway--I'll definitely be hiring a tax professional this year to make sure about the tax questions.

Recently I was approached by a company here in Quebec that was interested in hiring me on a part-time basis as a consultant. They had an immigration specialist who helped me apply for a work permit. Because my profession falls under the list of NAFTA-exempt professions, I was able to get a work permit very easily--it was a matter of gathering the documents and going to the border. I went to the border and paid $150 and they took my visitor record and replaced it with a work permit. I still work at my regular full-time job for my US employer.

Now my question is, what are the implications of this on my tax and benefits situation? I expect that I'll owe taxes on my consulting income in Canada? Will I owe taxes to Canada on my US income as if I were a PR? Am I eligible for a Quebec health card now (or, I guess, after the waiting period)?

I need to find a tax professional to help me--SOON!--but if someone knows anything about this and could give me an idea of what I can expect, I'd appreciate it!!

Thanks!!!!
AB

 

[dcpaley]

Hello,

There are two issues at play: Immigration and tax residency.

Once you are in Canada 183 days in a Calendar year, you are considered a resident of Canada for tax purposes and must report and pay income tax on your worldwide income. At the same time as a US citizen you must file a 1040 and report your worldwide income. The US will grant you tax credit for Canadian taxes paid.

Contact me via personal message on go to my site below. I'll recommend someone in your area.

 

[Leon]

As for Quebec health, as a temporary worker in Quebec, you should be eligible for health care. Here are some instructions on how you need to register: http://www.ramq.gouv.qc.ca/en/citoyens/assurancemaladie/arriver/sejour.shtml

 

[alex123]

Yes you must need to pay tax on work permit as well.I am also doing the same work.I used pay tax even i work as student over there.There is no exemption whoever you are, must need to pay tax as well.

 

[Jonboy]

Please help, I am hopelessly confused!!

The facts: I am a US citizen. At the end of last year my husband and I moved to Quebec. I continued to work for my US employer remotely (will salary and benefits) from Quebec, and I was issued a visitor record. In March my husband and I put in an application for permanent residence for me, with him as my sponsor. My understanding has been that I'm a visitor in Canada and therefore not eligible for benefits (health cards) or responsible for paying taxes to Canada (I continue to pay taxes on my US income as if I live in the US). I've got a US address, receive mail there, have my car registered in the US, etc.

Despite your apparent ties to the US, if your spouse lives in Canada and you have a home here you will likely be considered as a factual tax resident in Canada. You are therefore required to file a Canadian tax return if you owe tax here. You probably will because all your income in taxable in Canada (even if earned in the US) and tax rates are generally higher here. You get credit form income tax paid in the US and only owe the balance to the Canadian government.

When my PR is finally done and I land, I understand that I will have to pay, in total, the Canadian tax rate, first by paying my US taxes as usual and then by paying the difference to Canada. And I'll be eligible eventually for a health card, etc. Or that is what I understood anyway--I'll definitely be hiring a tax professional this year to make sure about the tax questions.

This is correct except that I believe you are tax resident in Canada already. Tax status is not the same as immigration status. I agree that it is a good idea to work with a tax professional - a proper accountant who has experience of international taxation - not H&R Block.

Recently I was approached by a company here in Quebec that was interested in hiring me on a part-time basis as a consultant. They had an immigration specialist who helped me apply for a work permit. Because my profession falls under the list of NAFTA-exempt professions, I was able to get a work permit very easily--it was a matter of gathering the documents and going to the border. I went to the border and paid $150 and they took my visitor record and replaced it with a work permit. I still work at my regular full-time job for my US employer.

Now my question is, what are the implications of this on my tax and benefits situation? I expect that I'll owe taxes on my consulting income in Canada? Will I owe taxes to Canada on my US income as if I were a PR? Am I eligible for a Quebec health card now (or, I guess, after the waiting period)?

If there was any question before there isn't now. If your home is in Canada and have the legal right to work in Canada then you are a tax resident. You need to file a T2125 with your Canadian tax return. You use this form to calculate the taxable profit from your consulting business. As I said above, you will likely also owe additional tax on your US income as well.

As for the health card - I believe so. However, I'm in BC and don't know the details of the system in Quebec.

I need to find a tax professional to help me--SOON!--but if someone knows anything about this and could give me an idea of what I can expect, I'd appreciate it!!

Thanks!!!!
AB

I hope this was some use.