Canadian Tax for salary earned in USA

[max_lee]

Hi,

I want to know if one needs to pay tax in canada if he is living as a PR with family in Canada and commutes to work everyday to US.

The situation is that I have a job in Metro Detroit area and looking to get my PR in a couple of months. The company is good and they don't mind my travelling from Windsor(Ontario). For sure there will be a Tax deduction at source from my company in US, but what about Canada, as a PR in Canada I know there will be some tax as well. I came to know that there is some kind of Tax agreement between US & Canada but not sure about the details. I know there are many folks who commute from Canada to US for work and hence raised this question. Any inputs will help, also if this a repeat topic pls excuse.

Thanks

Max

 

[PommeDeRoute]

Hello,

You will need to declare all of your US income earned after becoming a PR and a resident of Canada for tax purposes. Canada considers you a resident for tax purposes if you are a PR and you have significant ties to Canada, such as a family, property etc.

I would advise filing your US taxes first so that when you file your Canadian taxes, you will have proof of how much tax you paid to the US government. The US and Canada do have a tax treaty to prevent people from being double taxed. You will not have to pay Canadian tax on the income that was taxed by the US.

For the US, you will need to declare any income earned in Canada. I believe you can earn up to $70000 USD in foreign income without being taxed on it.

 

[max_lee]

Thanks for your inputs PommeDeRoute.

Anyone else with their inputs, any help will do.

Thanks

Max

 

[haver]

Actually the issue is not as easy as it seems.

1) You have to pay American taxes first to USA and the difference between Canadian taxes in Ontario to Canada.

However you have another option.

2) You fill the form that you did not decide yet will you be Canadian resident or not (in case if you are immigrating
to Canada with wife and children). It can help you to pay American taxes only (let say for the first 2 years).

The form itself is 4pages long and helps to disclose connections with Canada.

 

[max_lee]

Thanks Haver, anyone else's take on this.

Max