Working remotely in Canada under an H1B visa vs Independent Contractor

[MortyC137]

Hi all,

When working for a U.S. employer, the combo H1B + Canadian Residency seems risky and complicated tax wise and travel wise.

I wonder if anyone here managed to get hired as a Canadian-based independent contractor instead of H1B?
It solves a lot of problems. On the downside, the IRS might find that your work relationship is like that of a regular employee, not like that of a freelancer, and your employer could get into trouble. Does this ever happen?

Any insight?

 

[canuck78]

Hi all,

When working for a U.S. employer, the combo H1B + Canadian Residency seems risky and complicated tax wise and travel wise.

I wonder if anyone here managed to get hired as a Canadian-based independent contractor instead of H1B?
It solves a lot of problems. On the downside, the IRS might find that your work relationship is like that of a regular employee, not like that of a freelancer, and your employer could get into trouble. Does this ever happen?

Any insight?

Lots of people working for US clients in Canada on a contract basis.

 

[MortyC137]

Lots of people working for US clients in Canada on a contract basis.

Do you think it's risky for long-term, full-time contracts? (https://strategiccfo.com/irs-cracks-down-on-employee-misclassification/)

Just to clarify, I'm not talking about American/Mexican/Canadian citizens, who have more options thanks to NAFTA.

 

[canuck78]

Do you think it's risky for long-term, full-time contracts? (https://strategiccfo.com/irs-cracks-down-on-employee-misclassification/)

Just to clarify, I'm not talking about American/Mexican/Canadian citizens, who have more options thanks to NAFTA.

If you are truly working as an independent contractor no issue. Many of the issues identified in the article you attached aren’t an issue for you as a foreign independent contractor.

 

[swan0206]

If you are truly working as an independent contractor no issue. Many of the issues identified in the article you attached aren’t an issue for you as a foreign independent contractor.

What if someone is on H1b and employee of a company(US-based) but residing in Canada? They have to deal with tax situations?

 

[canuck78]

What if someone is on H1b and employee of a company(US-based) but residing in Canada? They have to deal with tax situations?

It is an entirely different situation when it comes to taxation and deductions for the employer and employee. Some employers are not willing to employ someone if they are living in Canada. It is something you have to discuss with your employer.