Daily commute (Detroit-Windsor) (H1b and Canada PR)

[BhargavDadhaniya]

Hi all- CRA has sent me notice of reassessment mid last year for 2020. CRA basically asked for that I owe them around $30k as they did not receive US tax return proof. My accountant then sent the IRS transcripts to CRA after that. Just now, they sent notice of collection saying I still owe them the amount. Looks like CRA never received my US tax return. Anyone had similar issue before and knows the fix for this?

 

[marako1201]

Hi all- CRA has sent me notice of reassessment mid last year for 2020. CRA basically asked for that I owe them around $30k as they did not receive US tax return proof. My accountant then sent the IRS transcripts to CRA after that. Just now, they sent notice of collection saying I still owe them the amount. Looks like CRA never received my US tax return. Anyone had similar issue before and knows the fix for this?

I'm a Canadian PR living in BC and working full-time in the U.S. on an H-1B. CRA sent me reassessments for both 2019 and 2020 and are asking me to pay over 55K CAD in taxes even though I showed them all the IRS tax returns, W-2s etc. I have recent received collection notices too. Has anyone here resolved the issues with the CRA? Essentially, trying to understand if people in my situation owe taxes in both countries even though all of the sources of income are just in one where taxes are withheld?

 

[CanucksRajiv]

Do all employers who have offices near Canada border (Buffalo and Detroit) allow commute from Canada? I spoke to couple of hiring recruiters and most of them don't have any clue on that. So, what should be ideal strategy? Accept the offer and then figure it out?

 

[justinline]

Hi all- CRA has sent me notice of reassessment mid last year for 2020. CRA basically asked for that I owe them around $30k as they did not receive US tax return proof. My accountant then sent the IRS transcripts to CRA after that. Just now, they sent notice of collection saying I still owe them the amount. Looks like CRA never received my US tax return. Anyone had similar issue before and knows the fix for this?

How did you send the documents......in my experience it is better to create CRA online account and upload everything there.

 

[justinline]

I'm a Canadian PR living in BC and working full-time in the U.S. on an H-1B. CRA sent me reassessments for both 2019 and 2020 and are asking me to pay over 55K CAD in taxes even though I showed them all the IRS tax returns, W-2s etc. I have recent received collection notices too. Has anyone here resolved the issues with the CRA? Essentially, trying to understand if people in my situation owe taxes in both countries even though all of the sources of income are just in one where taxes are withheld?

Have you talked to CRA, usually in case of reassessment or audit, there are notes and reasoning on the case provided by the case officer. Only pain is it takes a while to get through to person who really understands cross border taxation, may take multiple attempts. In my case I had provided my 1040 and W2, but the officer asked for further proofs........ie IRS transcripts. I only knew about that when I called up.

Also are you commuter or full time remote from Canada. If latter I would suggest talk to good tax expert. Over the years I am hearing CRA is taking different position in such cases.

 

[justinline]

Do all employers who have offices near Canada border (Buffalo and Detroit) allow commute from Canada? I spoke to couple of hiring recruiters and most of them don't have any clue on that. So, what should be ideal strategy? Accept the offer and then figure it out?

Well your employer cannot stop you from living in Canada and commuting to work every day, only thing they may have restrictions of not allowing work outside US or State. You have Canadian PR or Citizenship, you have job and h1b on the US side within commutable distance........rest is logistics to figure out. Not a big deal.

 

[CanucksRajiv]

Well your employer cannot stop you from living in Canada and commuting to work every day, only thing they may have restrictions of not allowing work outside US or State. You have Canadian PR or Citizenship, you have job and h1b on the US side within commutable distance........rest is logistics to figure out. Not a big deal.

Thank you. Thats what my understanding was. When i asked this question to HR recruiter, they don't have any clue on this. In fact, they don't even think it can work out.

So, who is the right person within company to talk to regarding this?

 

[pr131985]

Hey guys, if you wfh (work from home) for a US company does CRA look at it differently?
I mean if you get paid in US and taxes are withheld in US do you have to file Canadian taxes first and pay CRA, and then request refund from IRS?
As effectively you are working in Canada and CRA is owed the money and not IRS. Does it really matter where you work?

The reason I ask is one of my friends got a notice of assessment from CRA when he started wfh during the pandemic. Now he is scared and keeps tab of how many days he works in US and Canada. Did anybody else face similar issue?

 

[justinline]

Thank you. Thats what my understanding was. When i asked this question to HR recruiter, they don't have any clue on this. In fact, they don't even think it can work out.

So, who is the right person within company to talk to regarding this?

Best place is these forums here, I dont think you will get resources like these else where. Only pain is to dig through and parse lot of information. No doubt time consuming.
Other than that in the company talk to company lawyer or someone in HR who handles immigration.

 

[justinline]

Hey guys, if you wfh (work from home) for a US company does CRA look at it differently?
I mean if you get paid in US and taxes are withheld in US do you have to file Canadian taxes first and pay CRA, and then request refund from IRS?
As effectively you are working in Canada and CRA is owed the money and not IRS. Does it really matter where you work?

The reason I ask is one of my friends got a notice of assessment from CRA when he started wfh during the pandemic. Now he is scared and keeps tab of how many days he works in US and Canada. Did anybody else face similar issue?

It use to be straightforward few years back, as long as you paid taxes in US just claim that as credit and pay any top up taxes in Canada. In last few years I hear CRA has been hardening its position around remote work in Canada and the payroll is running in US.
As of now I hear cases both ends of spectrum. Remote workers who have been filling the US taxes and claiming those as credits on the Canadian side without any issue, and then there are those who do the same and they get reassessment or audit, asking for breakage or asking them to file taxes to CRA first.

 

[marako1201]

Have you talked to CRA, usually in case of reassessment or audit, there are notes and reasoning on the case provided by the case officer. Only pain is it takes a while to get through to person who really understands cross border taxation, may take multiple attempts. In my case I had provided my 1040 and W2, but the officer asked for further proofs........ie IRS transcripts. I only knew about that when I called up.

Also are you commuter or full time remote from Canada. If latter I would suggest talk to good tax expert. Over the years I am hearing CRA is taking different position in such cases.

Hey, yes, my accountant and I spoke with a couple of CRA agents and once I involved my Member of Parliament's office to help me with this issue, I got a call directly from the CRA guy who processed my return. Over the last year, I provided my 1040, W-2, IRS tax transcript for 2017-2020 years and details about the U.S.-Canada Tax Treaty convention. All of this resulted in CRA bringing down my amount owed from 75K to 22K for the year 2019. Then they reassessed my 2020 return and said I now owe them 35K. So I have been dealing with collection notices and calls asking me to pay over 57K in taxes.

Do you and others in a similar situation pay taxes in the U.S. and then pay additional amount to the CRA due to Canada's higher tax rates? In my situation I feel like I'm asked to pay over 55% in taxes when I add what I pay in the U.S. and what CRA says I should pay here in Canada. Seems unfair and unreasonable.

 

[justinline]

Hey, yes, my accountant and I spoke with a couple of CRA agents and once I involved my Member of Parliament's office to help me with this issue, I got a call directly from the CRA guy who processed my return. Over the last year, I provided my 1040, W-2, IRS tax transcript for 2017-2020 years and details about the U.S.-Canada Tax Treaty convention. All of this resulted in CRA bringing down my amount owed from 75K to 22K for the year 2019. Then they reassessed my 2020 return and said I now owe them 35K. So I have been dealing with collection notices and calls asking me to pay over 57K in taxes.

Do you and others in a similar situation pay taxes in the U.S. and then pay additional amount to the CRA due to Canada's higher tax rates? In my situation I feel like I'm asked to pay over 55% in taxes when I add what I pay in the U.S. and what CRA says I should pay here in Canada. Seems unfair and unreasonable.

What is your situation....do you commute to work every day or are you full time remote?

You may have to file for refund from IRS and pay more taxes in Canada (rather all your taxes if CRA determines your work is being performed in Canada). Any way hire a good tax consultant or go for tax lawyers. May end up costing you more.

As I mentioned earlier, CRA would have been fine with just top up taxes few years back, increasingly they (not all CRA agents) are taking position that if you are working from Canada you need to pay majority of taxes in Canada.

So for future immigrants who are moving with jobs to Canada, better convert to contractor than have your payroll running in US, to avoid tax hassle.

For me I paid most of the taxes in US and paid some residual taxes in Canada. I was traveling Monday to Thursday for work, I did get reassessment but got resolved.

 

[marako1201]

What is your situation....do you commute to work every day or are you full time remote?

You may have to file for refund from IRS and pay more taxes in Canada (rather all your taxes if CRA determines your work is being performed in Canada). Any way hire a good tax consultant or go for tax lawyers. May end up costing you more.

As I mentioned earlier, CRA would have been fine with just top up taxes few years back, increasingly they (not all CRA agents) are taking position that if you are working from Canada you need to pay majority of taxes in Canada.

So for future immigrants who are moving with jobs to Canada, better convert to contractor than have your payroll running in US, to avoid tax hassle.

For me I paid most of the taxes in US and paid some residual taxes in Canada. I was traveling Monday to Thursday for work, I did get reassessment but got resolved.

I used to commute to work across the border at least 3-4 days a week and fly to different ops centers of my employer for work all across the U.S. prior to the pandemic. I will start going back in to the office starting Monday (2/28) in a hybrid model. My issue with the CRA is on my 2019 return where majority of my work was in the U.S. with occasional WFH in Canada. My marginal tax rate in Canada turned out to be 41% and I pay around 30% in the U.S. and contribute to 401K and Roth 401K in the U.S. Even with all of this evidence provided to the CRA, they claim that I owe them tens of thousands of dollars in taxes.

 

[justinline]

I used to commute to work across the border at least 3-4 days a week and fly to different ops centers of my employer for work all across the U.S. prior to the pandemic. I will start going back in to the office starting Monday (2/28) in a hybrid model. My issue with the CRA is on my 2019 return where majority of my work was in the U.S. with occasional WFH in Canada. My marginal tax rate in Canada turned out to be 41% and I pay around 30% in the U.S. and contribute to 401K and Roth 401K in the U.S. Even with all of this evidence provided to the CRA, they claim that I owe them tens of thousands of dollars in taxes.

In my opinion if CRA is quoting that high a number........that is only possible if they are not giving you proper credit for the taxes paid in the US. 401k numbers are deductible on the CRA side as well.
Get a second opinion with what you filed make sure nothing wrong on your side.

 

[CanucksRajiv]

Hey, yes, my accountant and I spoke with a couple of CRA agents and once I involved my Member of Parliament's office to help me with this issue, I got a call directly from the CRA guy who processed my return. Over the last year, I provided my 1040, W-2, IRS tax transcript for 2017-2020 years and details about the U.S.-Canada Tax Treaty convention. All of this resulted in CRA bringing down my amount owed from 75K to 22K for the year 2019. Then they reassessed my 2020 return and said I now owe them 35K. So I have been dealing with collection notices and calls asking me to pay over 57K in taxes.

Do you and others in a similar situation pay taxes in the U.S. and then pay additional amount to the CRA due to Canada's higher tax rates? In my situation I feel like I'm asked to pay over 55% in taxes when I add what I pay in the U.S. and what CRA says I should pay here in Canada. Seems unfair and unreasonable.

Are the amount quoted in USD or CAD?