Working remotely for U.S. companies while on study permit: payroll taxes?

[ProfMac]

Hello!

I am set to come to Canada in the fall to start a graduate program. I am a U.S. citizen. I work remotely for several companies as an employee - so they deduct federal and state taxes as well as social security and medicare, etc, from my paychecks.

In order to continue doing this work (which will help fund my education), I need to retain a U.S. address, which I intend to do as I own a home here that will be rented out in my absence.

Here's the issue: a tax preparer with experience in both U.S. and Canada taxes tells me that the CRA will likely request that my employers pay Canada's 'payroll taxes', and that if my employers do not do that (or switch to Canadian payroll, which they're not going to do), then they could be penalized/fined by the CRA.

Is this true? What I've read elsewhere is that my taxes paid to the U.S. for Social Security/Medicare, etc would be used as a credit on my Canadian taxes. Granted, there's not a lot of information about how remote workers should handle taxes in either country, but this detail seems important. And this also could derail my education plans.

Does anyone have expertise or previous experience in this area? Thanks for any clarification (or additional resources) you can provide!

 

[canuck_in_uk]

Here's the issue: a tax preparer with experience in both U.S. and Canada taxes tells me that the CRA will likely request that my employers pay Canada's 'payroll taxes', and that if my employers do not do that (or switch to Canadian payroll, which they're not going to do), then they could be penalized/fined by the CRA.

Is this true? What I've read elsewhere is that my taxes paid to the U.S. for Social Security/Medicare, etc would be used as a credit on my Canadian taxes. Granted, there's not a lot of information about how remote workers should handle taxes in either country, but this detail seems important. And this also could derail my education plans.

Hi

Who is this "tax preparer"?? CRA won't request that your US employer remit Canadian taxes from your pay, nor can CRA penalize your employer for paying you in the US.

Your US employer can continue to pay you exactly as they do now. When it comes to tax season, file your US tax return, then file your Canadian taxes and declare the taxes already paid in the US.

 

[ProfMac]

Phew! It seemed odd - I mean, I would guess the CRA doesn't have time to track down random US companies to try to obtain payroll taxes. :-X

I ended up calling the CRA last night to ask - and the person I spoke to confirmed what you've said. I just file in both countries and depending on where I'm a tax resident I pay taxes to that country.

Thanks for your reply!

 

[johnsonvu]

I also plan to do the same thing. However, I wonder is it eligible for changing study from full time to part-time after you successfully obtained a study permit as an international student?
The reason I'm asking this question because CIC only issue study permit to int' students for full-time study program.
I will do the remote work in the office hours (9-5) and attend classes in the evenings.

 

[canuck78]

I also plan to do the same thing. However, I wonder is it eligible for changing study from full time to part-time after you successfully obtained a study permit as an international student?
The reason I'm asking this question because CIC only issue study permit to int' students for full-time study program.
I will do the remote work in the office hours (9-5) and attend classes in the evenings.

A study permit is granted for full-times studies where studies are priority and you can work 20 hours a week to support yourself. Still trying to figure out what you are doing. Have you been accepted into a full-time program and still have H1B? Does your US employer have any Canadian locations or clients?