Canadian citizens living in Canada, but working in USA

[Harry001in]

Hello,

I am a Canadian citizen and I have question regarding working in US but living in Canada.

Would I be paying taxes in both USA and Canada? The US company will cut income tax based on procedures set in the US province. And since I will be living in Canada, would Canada cut taxes as well?
How does it work?

 

[Natan]

As your employer will be withholding taxes from your payroll, you will file a U.S. Federal tax return. If state taxes are also withheld, then you will file the appropriate state tax return. Some municipalities and counties also have tax withholdings, so you may also have to file those returns. Once you fill out your U.S. tax returns, you use that information to fill out your Canadian tax returns.

You should be able to deduct most, if not all, of your U.S. taxes from your Canadian tax return. It is not guaranteed that you will not owe any taxes on your Canadian return.

 

[Harry001in]

As your employer will be withholding taxes from your payroll, you will file a U.S. Federal tax return. If state taxes are also withheld, then you will file the appropriate state tax return. Some municipalities and counties also have tax withholdings, so you may also have to file those returns. Once you fill out your U.S. tax returns, you use that information to fill out your Canadian tax returns.

You should be able to deduct most, if not all, of your U.S. taxes from your Canadian tax return. It is not guaranteed that you will not owe any taxes on your Canadian return.

Thanks for the reply. Since I will be living in Canada, I will have to pay certain state and federal taxes as well including health care. How will Canada cut that portion from my paycheque?

Thanks,

 

[itsmyid]

Thanks for the reply. Since I will be living in Canada, I will have to pay certain state and federal taxes as well including health care. How will Canada cut that portion from my paycheque?

Thanks,

For your US tax, since you are getting paid by your US employer, it will withhold your US tax through payroll,
for your Canadian tax, it most likely wouldn't be cut from your payroll, but you will have to report your income during tax time and calculate how much you need to pay.
You will get some credit/deductions for the tax you pay to the US when filing for your Canadian tax, and vice versa

 

[screech339]

I agree with Natan. Do your US taxes first and then Canadian Taxes. Chances are you will no owe any taxes except maybe Ontario. They have a health premium tax. So you may end up paying only that if that applies to you.

The only time where by you pay taxes in Canada is if the tax difference is higher in Canada than in US. If that occurs, you only pay the difference. Ie. If you owe US 2000 CAD equivalent and you also owe Canada 3000 CAD. You pay 1000 to Canada. You only pay the difference in Canada if the tax difference is higher than US.

 

[Harry001in]

Thank you. So Canadian goverment will not deduct any federal or state tax from my paycheque? They will only decide if they owe me or I owe them any money when I file for taxes every year.

 

[screech339]

Thank you. So Canadian goverment will not deduct any federal or state tax from my paycheque? They will only decide if they owe me or I owe them any money when I file for taxes every year.

Canada cannot deduct any federal or state tax from your US paycheck. That is out of their jurisdiction. That won't happen. They can only collect from you the different in income tax if it is higher than US tax. If you end up owing less tax than US, you will not likely get a refund since you already paid too much tax to US. Canada is not going to compensate you because you paid too much US tax. However you will still get benefits like child benefits, gst credit, etc.

 

[Harry001in]

Thank you.

Since I will be working close to Canadian border, I do not need to buy any insurance plans from US employer, as I can come in Canada anytime for free health check up right?

Canadian companies do not have any insurance plans that people can choose from. All employees are entitled to medical, dental and other heal insurance benefits without having to choose any plans.

However, I will be working in US company for first time, so I just want to understand that does US companies tend to ask employees to choose health insurance plans on basis of monthly costs deducted from income?

I greatly appreciate everyone's feedback. Thank you

 

[screech339]

It is a tough call to make. You will not get any Dental Drug coverage in Canada. Only in US if you purchase the plan. No coverage if you end up having to go to ER in US for unexpected emergency. The ambulance will not take you across the border to Canada just because you have coverage there. Just be aware of the possible circumstances and be prepared for it and plan accordingly.

 

[alphazip]

Some U.S. employers offer health insurance to employees as a benefit with no cost to the employee, others have the employee pay part of the cost, and others over no benefits. If your employer does have an insurance plan that requires payment on your part, you will have to check with the employer to see whether there is any way to opt out.

Although you will be close to the Canadian border and can get back to Canada for heath services under most conditions, that's not to say that you couldn't have an emergency where you would end up in a U.S. hospital. Services in the U.S. are quite expensive, and will not be totally covered by your provincial government plan. So, it may be to your benefit to have some kind of plan in the U.S.

 

[Natan]

The are benefits to having health insurance in both countries. Some procedures are faster in one country than the other. Some procedures, like dental, may not be covered under any single plan, but you might be able to get some of the work done in Canada under one plan, and the rest in America under another, minimizing your out of pocket expenses. Under a vision plan, you might get the examination and frames in one country, and get the lenses in the other.

 

[Natan]

I agree with Natan.

I might have a coronary!

 

[screech339]

I might have a coronary!

Life would be dull and boring if everyone agrees with everyone.

 

[itsmyid]

Thank you.

Since I will be working close to Canadian border, I do not need to buy any insurance plans from US employer, as I can come in Canada anytime for free health check up right?

Canadian companies do not have any insurance plans that people can choose from. All employees are entitled to medical, dental and other heal insurance benefits without having to choose any plans.

I greatly appreciate everyone's feedback. Thank you

I must have been living in a fake Canada then, ... as far as I know, people in Ontario are only covered for general medical care, you will have to either buy your own dental, vision, prescription drug coverage or participate in your employer's program, which usually offers you different level of coverages with some subsidies, depending on how much coverage you want and how much you are willing to pay

 

[canuck78]

On top of no dental, vision drug plan also no private or semi-private beds in many hospitals, no physio/massage/acupuncture/chiropractor (some provinces cover), orthodontist, orthotics,variou medical devices, etc. I would keep the medical insurance especially since you will be driving to work.