Receiving payment from US

[Nick1233]

Hi guys,

Wondering if anyone has thoughts on receiving payments from Wells Fargo US. I had setup a RBC USD account in Canada and shared ACH (Automated Clearing House, E1700) form with a vendor in USA. However, they are claiming that they aren't able to setup a direct deposit. ("The routing number is correctly formatted, but is not a valid destination for domestic electronic payments. Please note that international payments are not allowed.")

Is there any recommendations to receive funds from US?

 

[harirajmohan]

Hi guys,

Wondering if anyone has thoughts on receiving payments from Wells Fargo US. I had setup a RBC USD account in Canada and shared ACH (Automated Clearing House, E1700) form with a vendor in USA. However, they are claiming that they aren't able to setup a direct deposit. ("The routing number is correctly formatted, but is not a valid destination for domestic electronic payments. Please note that international payments are not allowed.")

Is there any recommendations to receive funds from US?

Is the routing number 9 digits?

Also its much possible they are not allowed as the account is originated outside US. These are all to prevent money laundering internationally. Why dont you simply give your US account and then you do the transfer every month using money transfer sites(without any incoming deposit/wire fees etc). Not sure why this is a big deal.
Even if you bring money into Canadian USD account, still you need to convert it to CAD which you will use the same bank(i doubt they would give best rate as money transfer sites offer best rates).

 

[Nick1233]

Is the routing number 9 digits?

Also its much possible they are not allowed as the account is originated outside US. These are all to prevent money laundering internationally. Why dont you simply give your US account and then you do the transfer every month using money transfer sites(without any incoming deposit/wire fees etc). Not sure why this is a big deal.
Even if you bring money into Canadian USD account, still you need to convert it to CAD which you will use the same bank(i doubt they would give best rate as money transfer sites offer best rates).

Yes, it is a 9 digit routing number. I thought about international transfer restrictions too but the bankers in RBC claimed that it happens all the time and that is why they recommended opening a USD account (not CAD). For conversion from USD to CAD, i would be using third party for better rates, that is not a big concern for me.

In terms of using an account in US, wouldn't there be a tax implication? The way everything is setup is a business in US paying another business in Canada (registered by me in Ontario). Wouldn't direct deposit into an account in US be considered as income by IRS?

 

[harirajmohan]

Yes, it is a 9 digit routing number. I thought about international transfer restrictions too but the bankers in RBC claimed that it happens all the time and that is why they recommended opening a USD account (not CAD). For conversion from USD to CAD, i would be using third party for better rates, that is not a big concern for me.

1. In terms of using an account in US, wouldn't there be a tax implication? The way everything is setup is a business in US paying another business in Canada (registered by me in Ontario). Wouldn't direct deposit into an account in US be considered as income by IRS?

Seems you can avoid US taxes but anyway to be filed here.
https://turbotax.intuit.ca/tips/usi...ome-tax-treaty-to-reduce-double-taxation-6229
If direct deposit not working then get the cheque, onl issue is that it will take some days to clear the fund.

1.Yes its US income hence will be taxed but anyway you would end up paying more in Canada(i assume but not sure about business taxes).

 

[Nick1233]

Seems you can avoid US taxes but anyway to be filed here.
https://turbotax.intuit.ca/tips/usi...ome-tax-treaty-to-reduce-double-taxation-6229
If direct deposit not working then get the cheque, onl issue is that it will take some days to clear the fund.

1.Yes its US income hence will be taxed but anyway you would end up paying more in Canada(i assume but not sure about business taxes).

Yeah, i don't have any status in US other than a B1/B2 visa holder. Not sure if having income in US is recommended in this case.

Looks like RBC is doing the right thing, they have setup International ACH Transfer (IAT). However, seems like not all US banks support this.
Trying to get in touch with Wells Fargo to see if they have any idea.

In worst case, seems like i will have to deal with paper checks.

 

[DEEPCUR]

Have you thought of trying with USD account from Canada through TD bank? TD operates in both countries unlike RBC which caters only Canada.

 

[Nick1233]

Have you thought of trying with USD account from Canada through TD bank? TD operates in both countries unlike RBC which caters only Canada.

Thanks, even RBC bankers said there is one branch in US that i could use. But no matter what, if the money is deposited within US, wouldn't they end up generating income documents for the purpose of Tax etc?

 

[DEEPCUR]

Thanks, even RBC bankers said there is one branch in US that i could use. But no matter what, if the money is deposited within US, wouldn't they end up generating income documents for the purpose of Tax etc?

It’s not just about branch, TD operates as a bank in US for US customers , whereas RBC is a Canadian bank and offer this service mainly for Canadian expats.

If this is not working out, I suggest you do W8 BEN form to reduce your tax withholding to 15% instead of 30%. I believe you can credit for the tax filed while filing Canadian tax returns anyways and pay rest to Canada.

 

[lampbreaker]

The RBC USD account is still a Canadian account (just held in USD currency). You can open an account with a US Bank (or RBC US) and use that.

 

[canuck78]

The RBC USD account is still a Canadian account (just held in USD currency). You can open an account with a US Bank (or RBC US) and use that.

If he doesn’t have H1B don’t think he/she can be paid for work into a US account in the US.

 

[lampbreaker]

If he doesn’t have H1B don’t think he/she can be paid for work into a US account in the US.

If the work is performed in Canada, then H1B/US status is irrelevant. Even if the work were performed in the US, from immigration/labor law perspective, the country/currency of payment does not matter. Only tax/banking related laws may mandate that, but that will be independent of H1B status.

 

[Nick1233]

If the work is performed in Canada, then H1B/US status is irrelevant. Even if the work were performed in the US, from immigration/labor law perspective, the country/currency of payment does not matter. Only tax/banking related laws may mandate that, but that will be independent of H1B status.

Yeah, i'm just looking to avoid dealing with IRS.

 

[canuck78]

If the work is performed in Canada, then H1B/US status is irrelevant. Even if the work were performed in the US, from immigration/labor law perspective, the country/currency of payment does not matter. Only tax/banking related laws may mandate that, but that will be independent of H1B status.

Not arguing about the currency. Should be deposited in a US account in Canada versus paid in a US account in the US without a work permit.

 

[lampbreaker]

Not arguing about the currency. Should be deposited in a US account in Canada versus paid in a US account in the US without a work permit.

Again, work permit does not matter. Immigration law does not care which country you got paid in, as long as you got paid.

 

[harirajmohan]

Not arguing about the currency. Should be deposited in a US account in Canada versus paid in a US account in the US without a work permit.

Lot many top executives and employees are based outside of US and still get paid in USD(in the US bank accounts).
The rule is only to restrict employers to pay salary to foreign workers while inside US and no restriction for foreigners getting paid in US while outside(as long as taxes are paid).