Taxes/Payroll - Working in US/ Living in Windsor

[rthtor]

I still cannot interpret if your withholding(tax at source) is being paid to IRS or CRA. I havent seen w2 tax being paid to cra hence i cannot compare or ask questions based on that.
Irrelevant of above, simply follow this logic - file tax return to the country where your w2 tax is paid. Then include that tax paid in the second country and file the return.

Per my understanding, CRA cannot have multiple forms for same 401k contribution exemption as i assume that they just named the form with "commuters" representing the majority of users. Lets wait for others comments on it or consult some tax consultant to confirm or you can pay additional tax for that contribution.
may be you can search if you have any additional form to get 401k contribution exemption.

>I still cannot interpret if your withholding(tax at source) is being paid to IRS or CRA.
My US company has been withholding USD tax at source for the entire TY2023, and has paid it to the IRS.
CRA has had no withholding or tax payments at all so far for TY2023.

 

[harirajmohan]

>I still cannot interpret if your withholding(tax at source) is being paid to IRS or CRA.
My US company has been withholding USD tax at source for the entire TY2023, and has paid it to the IRS.
CRA has had no withholding or tax payments at all so far for TY2023.

Then its same case like i initially said.

1. File IRS.
2. Filing CRA: Include income from US with the total of 1040 AGI line11 and 401k contribution from w2. Mention/include the taxes paid in US. Include RC268 form to get the 401k income exempted from tax. If any additional tax to be paid then contribute to rrsp or pay tax. File it.
If you feel you are not eligible for RC268 then you need to pay additional rrsp contribution or tax to compensate. Per my understanding the form is badly named as commuters but its for US pension contribution amount exemption, nothing more to worry/interpret too much about it.
Use RC268 and see if they accept as you are not doing anything illegal. if they say you are not eligible then you pay the tax.

I and many commuters get audited and get bugged for 3+ years in some tax return. For 2018 audits, i resolved it in 4 iterations and later i paid some final tax to avoid bugging me as they have bad habit of trouble only legal tax payers. So you dont need worry about getting audit and paying taxes later. You are not doing anything illegal. If denial of tax claim is illegal then thousands of people will be in jail for getting tax exemption denied every year.

if you still being doubtful then please check with some tax guys and per my understanding they will too ask you to use RC268.

 

[rthtor]

Then its same case like i initially said.

1. File IRS.
2. Filing CRA: Include income from US with the total of 1040 AGI line11 and 401k contribution from w2. Mention/include the taxes paid in US. Include RC268 form to get the 401k income exempted from tax. If any additional tax to be paid then contribute to rrsp or pay tax. File it.
If you feel you are not eligible for RC268 then you need to pay additional rrsp contribution or tax to compensate. Per my understanding the form is badly named as commuters but its for US pension contribution amount exemption, nothing more to worry/interpret too much about it.
Use RC268 and see if they accept as you are not doing anything illegal. if they say you are not eligible then you pay the tax.

I and many commuters get audited and get bugged for 3+ years in some tax return. For 2018 audits, i resolved it in 4 iterations and later i paid some final tax to avoid bugging me as they have bad habit of trouble only legal tax payers. So you dont need worry about getting audit and paying taxes later. You are not doing anything illegal. If denial of tax claim is illegal then thousands of people will be in jail for getting tax exemption denied every year.

if you still being doubtful then please check with some tax guys and per my understanding they will too ask you to use RC268.

Thank you for the continued support and your kindness. I'll be sure to pay it forward.

>I and many commuters get audited and get bugged for 3+ years in some tax return.
Got it! This is the key point I've tried to highlight. I don't commute at all, I'm fully remote. And if they're this scrutinous with
people who commute more often than not in a week, I wonder how hard they'll come after those that don't commute at all.

>Mention/include the taxes paid in US.
Here, you are referring to filing an FTC claim with T2209, correct?

>they will too ask you to use RC268
This is my very first year paying/filing Canadian taxes. My capacity for RRSP allotment is 0%,

 

[harirajmohan]

>Mention/include the taxes paid in US.
Here, you are referring to filing an FTC claim with T2209, correct?

You wont fill the exact line number in the form as your tax software would do it when it generates the final file.
So look for "Foreign Income & Foreign Tax Credits" section and just fill the foreign income and foreign tax paid.

 

[missedTheGCBus]

@harirajmohan Do you have any idea?

Additional Question: I read that it would be an issue from CRA as my US employer would be required to withold Canadian Payroll taxes, if I work remote from Canada. Better to travel at least few days in a year to avoid this.

If Social security tax is withheld by US, what do you do when you file as a Canadian resident? Do you get a refund?

@ejackson6691 how has this been going for you, for me the question is what is the right number of days for "at least few days" 50% of days, once a week?

 

[missedTheGCBus]

Got it! This is the key point I've tried to highlight. I don't commute at all, I'm fully remote. And if they're this scrutinous with
people who commute more often than not in a week, I wonder how hard they'll come after those that don't commute at all.

I too am very concerned about this? I traveled ~50% of days last year, but other 50% from home.
My concern is that if they ask for I94 or some such proof then I might be trouble