US Citizen with Canadian PR working remotely for American Company

[themanoftheland8]

Hello all,

I'm currently a US citizen who is about to get married to a Canadian citizen. I plan to move there shortly thereafter (once the paperwork goes through). Amidst the changes, my job has offered me the ability to continue to work for them while living in Ontario. I've done a bit of research and saw a couple of threads that are somewhat related to this, but nothing specifically related to being a direct employee (as opposed to a consultant).

Specifically, I'm wondering about a few things...
1) Taxes. Do I get double taxed for the 2 countries?
2) Retirement. Is there any way to contribute to a pension if I'm working for a US company? Or does my retirement plan stay the same as it was as if I was living in the US?
3) Health care. If I'm working for a US company, am I still entitled to the health care benefits of a PR?

Alternatively, does anyone have any recommendations for who to talk to about this?

Thanks so much!

 

[christinamh]

I am in a similar position. I am a US citizen. My spouse is a Canadian citizen. We are currently waiting on our COPR and then I will officially immigrate. I work remotely (from home on my computer) for a US company. I am completely dumbfounded on how I will do my taxes. From everything I have read Canada and the US have a tax treaty so I won't be double taxed. But I still don't even know where to start. I will not work for a Canadian employee at all. I will make no Canadian income. I will continue to work for the US company (as a self employed independent contractor) and make only USD deposited into my American bank account. If anyone has any insight at all on how taxes would work for this, please fill me in. I am going blue in the face trying to figure this out.

 

[torontosm]

Amidst the changes, my job has offered me the ability to continue to work for them while living in Ontario. I've done a bit of research and saw a couple of threads that are somewhat related to this, but nothing specifically related to being a direct employee (as opposed to a consultant).
1) Taxes. Do I get double taxed for the 2 countries?
2) Retirement. Is there any way to contribute to a pension if I'm working for a US company? Or does my retirement plan stay the same as it was as if I was living in the US?
3) Health care. If I'm working for a US company, am I still entitled to the health care benefits of a PR?
Alternatively, does anyone have any recommendations for who to talk to about this?

Is your company registered in Canada? If not, then you can't be a direct employee as they would need to establish an entity that would withold and file taxes on your behalf.

With regard to taxes, you would not be double taxed due to tax treaties that exist between the US and Canada. Rather, you would in effect pay taxes at whichever rate was higher (or pay taxes in the lower rate jurisdiction and top it up in the other jurisdiction).

I'm not sure about pensions, but as a PR living in Canada, you would qualify for provincial healthcare, regardless of where or if you were working.

 

[christinamh]

Is your company registered in Canada? If not, then you can't be a direct employee as they would need to establish an entity that would withold and file taxes on your behalf.

With regard to taxes, you would not be double taxed due to tax treaties that exist between the US and Canada. Rather, you would in effect pay taxes at whichever rate was higher (or pay taxes in the lower rate jurisdiction and top it up in the other jurisdiction).

I'm not sure about pensions, but as a PR living in Canada, you would qualify for provincial healthcare, regardless of where or if you were working.

So since I'm an independent contractor (I receive a 1099) and not a direct employee (no W2, only 1099) I should be fine right? So can I pay taxes in the US first, then claim the tax credit in Canada and then just pay the difference (since Canadian rates are higher) here in Canada? Or would it make sense to pay Canadian first and then claim the tax credit in the states after?

 

[themanoftheland8]

Wow, thanks for the replies.

@torontosm,

Nope, my company is not registered in Canada. For my personal knowledge though... why do they have to register in Canada? My understanding was that I just have to pay US taxes the way I do today, then report those to the Canadian government in April (or whenever I file the Canadian taxes) and pay the difference?

 

[Ponga]

Americans also have an extended deadline to file with the IRS, if they are living in Canada (or anywhere abroad). The due date is June 15th.

 

[blissincanada]

Wow, thanks for the replies.

@torontosm,

Nope, my company is not registered in Canada. For my personal knowledge though... why do they have to register in Canada? My understanding was that I just have to pay US taxes the way I do today, then report those to the Canadian government in April (or whenever I file the Canadian taxes) and pay the difference?

@themanoftheland8, did you ever get an answer to your question above? Thanks !

 

[MW2015]

I too live in Canada as a PR, married to Canadian Citizen. I work for a US Company and get paid entirely in US dollars. This is how taxes work for me, been doing this since 2009.

Your paycheck has deductions for US Federal taxes. so end of the year you need to work with a US/Canada accountant depending how complicated your situation is. But typically we do the US return, file for the tax refund from the US based on what is owed in Canada. Then pay Canada, which is usually more so you end up getting most of your taxes you paid in the US back but have to pay an additional 10% or more to Canada. So I end up having to pay quarterly estimated payments in Canada. So at the end of the year, especially right now with the exchange rate, I am getting killed on the Canada tax side, so estimated payments keep going up and up. But suggest a good accountant with both US and Canada experience or accountants from both sides.

 

[TCM2016]

Hi all, I was wondering if anyone found out any other answers to this. I am also an American Citizen applying for Canadian PR Status (in process), My husband is Canadian. I work remotely for an American Company. @themanoftheland8 did you find anyone to talk to about this?

 

[yekcam]

I too live in Canada as a PR, married to Canadian Citizen. I work for a US Company and get paid entirely in US dollars. This is how taxes work for me, been doing this since 2009.

Your paycheck has deductions for US Federal taxes. so end of the year you need to work with a US/Canada accountant depending how complicated your situation is. But typically we do the US return, file for the tax refund from the US based on what is owed in Canada. Then pay Canada, which is usually more so you end up getting most of your taxes you paid in the US back but have to pay an additional 10% or more to Canada. So I end up having to pay quarterly estimated payments in Canada. So at the end of the year, especially right now with the exchange rate, I am getting killed on the Canada tax side, so estimated payments keep going up and up. But suggest a good accountant with both US and Canada experience or accountants from both sides.

I am in this exact situation (US Citizen living in Ontario as PR working for US Company) as of the New Year. So perfectly ok to have my company continue to deduct US taxes and pay Canada after the fact? What about state vs. provincial taxes? Thanks much!

 

[Alex54321]

So since I'm an independent contractor (I receive a 1099) and not a direct employee (no W2, only 1099) I should be fine right? So can I pay taxes in the US first, then claim the tax credit in Canada and then just pay the difference (since Canadian rates are higher) here in Canada? Or would it make sense to pay Canadian first and then claim the tax credit in the states after?

You can read/study another forum:
https://forums.serbinski.com/viewtopic.php?f=2&t=13471

"...The correct process is to prepare BOTH returns simultaneously, reporting ALL income on both returns, but WITHOUT FTC's. Then as (1) says, you will claim US tax as an FTC on the US income reported on your Cdn return, and FTC on CDn tax on CDn income reported on your US return...."