US employer working from Canada

[siroccoon]

All,
Anyone working for a US employer from Canada? What is the process of filing the returns in Canada at the end of the year? How much extra tax needs to be paid to CRA by declaring the global income and deducting the federal and state taxes paid in States?

If someone throws out the details with numbers that would really help.

Thanks.

 

[chimney007]

If you are a resident of Canada:

1. You have to declare worldwide income...include amount paid by US Employer.
2. If US income considered earned in US ... probably have to file a US Tax Return.
3. Will get credit for US taxes paid as foreign tax credit. Based on a formula.

Best to consult a tax consultant well versed in Canadian & US taxes.

 

[jes_ON]

Anyone working for a US employer from Canada? What is the process of filing the returns in Canada at the end of the year? How much extra tax needs to be paid to CRA by declaring the global income and deducting the federal and state taxes paid in States?

Depends on where you performed the work.

If you commuted accross the border to work in the USA, then you would get a credit in Canada for taxes paid in the USA.
http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/canadian-residents-working-us/

If you physically performed the work in Canada (e.g. telecommuted from your residence in Canada), it would be the other way around - you first have to pay taxes to Canada, and then get the exclusion / tax credit for the USA. (And, even if you wouldn't ordinarily have to file a US tax return, you'll have to do it to get the refund.)

It depends on how much you made - at par, you might owe Canada some additional money, but with the year-end exchange rate, you'll probably break even. That's just a guess.

Canadian tax return is due April 30. You have a 2 month extension to file the US tax return (June 15 instead of April 15), but you'll pretty much have to fill them out simultaneously, so that doesn't help you much.

If this is your first time doing it and you can afford it, consulting a crossborder tax advisor is great advice.

If you're a do-it-yourselfer, tax software like U-File (and others) can handle it. But you still have to educate yourself. CRA website is pretty good, and calling the CRA - if you can get through - is useful if you have additional questions.

 

[rmust]

I am doing some research on this topic, but hope someone experienced here can share their knowledge with me.
Here is the scenario – I am a Canadian Permanent Resident residing in Toronto. Say I am employed by a US employer (in California) as a full time permanent employee. The employer does not have an office or incorporation in Canada. I work out of a home office as a Field Sales Engineering within Ontario, and I never have to work in the US. My employer will pay me directly to my Canadian bank account.
Question – what are the tax implications I need to watch out for? Because I do not have to do any work in US, does my employer need to withhold any US taxes? Will my employer also withhold Candian taxes and submit directly to CRA?
At the end of the day, will I end up paying higher taxes because my employer is a US based company?

Can anyone refer me to a good cross-border tax expert?

Thanks!

 

[siroccoon]

Depends on where you performed the work.

If you commuted accross the border to work in the USA, then you would get a credit in Canada for taxes paid in the USA.
http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/canadian-residents-working-us/

If you physically performed the work in Canada (e.g. telecommuted from your residence in Canada), it would be the other way around - you first have to pay taxes to Canada, and then get the exclusion / tax credit for the USA. (And, even if you wouldn't ordinarily have to file a US tax return, you'll have to do it to get the refund.)

It depends on how much you made - at par, you might owe Canada some additional money, but with the year-end exchange rate, you'll probably break even. That's just a guess.

Canadian tax return is due April 30. You have a 2 month extension to file the US tax return (June 15 instead of April 15), but you'll pretty much have to fill them out simultaneously, so that doesn't help you much.

If this is your first time doing it and you can afford it, consulting a crossborder tax advisor is great advice.

If you're a do-it-yourselfer, tax software like U-File (and others) can handle it. But you still have to educate yourself. CRA website is pretty good, and calling the CRA - if you can get through - is useful if you have additional questions.

Thanks a lot! I will hire a tax consultant.

 

[rmust]

I am doing some research on this topic, but hope someone experienced here can share their knowledge with me.
Here is the scenario – I am a Canadian Permanent Resident residing in Toronto. Say I am employed by a US employer (in California) as a full time permanent employee. The employer does not have an office or incorporation in Canada. I work out of a home office as a Field Sales Engineering within Ontario, and I never have to work in the US. My employer will pay me directly to my Canadian bank account.
Question – what are the tax implications I need to watch out for? Because I do not have to do any work in US, does my employer need to withhold any US taxes? Will my employer also withhold Candian taxes and submit directly to CRA?
At the end of the day, will I end up paying higher taxes because my employer is a US based company?

Can anyone refer me to a good cross-border tax expert?

Thanks!

I got clarification to my doubts above and though I would share it here. This is what my potential future employer told me: They will pay me directly to my Canadian bank account in CAD, and withhold from my pay CRA taxes such as EI, CPP, Federal Taxes, etc... The employer will submit these deductions from my pay directly to CRA.
The employer will no need to submit and American taxes from my pay to the IRS because I will only be working in Canada (not in USA).
Since I will be working from a home office, I can get a tax break from CRA.
I will be using my car for work, but will not be able to get a tax break from CRA on that because the employer will be providing me with a generous car allowance.


Hope this information helps others...