Working Remotely from the US

[Jess and Andrew 1]

Hi all,

My fiance and I are in the final stages of the K1 process, awaiting an interview letter from Montreal.

However, I wanted to pose a question to those of you who may have experienced a similar situation. Andrew works as a software developer for a company in Toronto, who really doesn't want to lose him when he moves here on his K1 visa, and they've offered to keep him, working remotely from our home in Philadelphia! I know this is done fairly regularly, but we're not sure how all the details work. Will he need employment authorization to start with, and I guess I'm just fairly baffled about the tax situation. Anybody familiar with this kind of situation?

Appreciate it!

Jess

[Deputy Purple 1,294]

Since he is working for a Canadian Company with no presence in the US he should be fine. He would have to pay US Taxes on his Canadian income though. If he is required to pay Canadian Taxes also then I believe he will have his income adjusted to account for that on his US Tax Returns.

[Golden_State 2]

This is an interesting question! For sure he will have to pay US taxes on his income (as soon as he becomes a legal resident), but I'm not sure about Canadian taxes. Since it's a Canadian employer, he may be double-taxed. I would contact CRA and ask about this. You can get an answer without giving your name or any of your information.

As for the employment authorization, that shouldn't be a factor because he is working for a Canadian company, based in Canada. Even if it's just his body that's in the US, the job is still technically in Canada - at least, that's how it was when my fiance was working from Canada for a company in the US.

[Krikit 1,164]

Like the others said, you don't need employment authorization for this situation. Non-residents are taxed at 25% but there is a tax treaty between Canada and the US. This post probably explains the tax situation the best:

http://www.visajourney.com/forums/topic/151720-working-for-canadian-company/page__view__findpost__p__2240124

[AB2CO 1]

I'm afraid I have to disagree. . . even though your fiance would be working for his Canadian employer, he is not allowed to perform any work while in the US unless he has a work visa or green card or some sort of authorization to work. Canada is fine with US citizens telecommuting back to their US job while in Canada - no special permits needed . . . but it is not allowed the other way around.

I am in a similar situation, and have not found any way to legally work for my Canadian employer while in the US . . . have to wait for my CR-1 to be approved.

I know people telecommute back to their Canadian jobs all the time, but they are actually breaking the law if they don't have some form of work authorization.

[HeatDeath 430]

I'm afraid I have to disagree. . . even though your fiance would be working for his Canadian employer, he is not allowed to perform any work while in the US unless he has a work visa or green card or some sort of authorization to work. Canada is fine with US citizens telecommuting back to their US job while in Canada - no special permits needed . . . but it is not allowed the other way around.

I am in a similar situation, and have not found any way to legally work for my Canadian employer while in the US . . . have to wait for my CR-1 to be approved.

I know people telecommute back to their Canadian jobs all the time, but they are actually breaking the law if they don't have some form of work authorization.

My understanding is that what an immigrant without work authorization is forbidden to do is "fill any American job an American citizen could be paid for". This includes "volunteering" for a position one will fill and be paid back-pay for. Telecommuting for a Canadian company should be fine.

Regarding taxes, US residents are taxed on worldwide income, but the tax treaty between Canada and the US allows you to fill out a Form 2555 or 2555-EZ, in which you list your Canadian-sourced income and it is subtracted off your gross income on the 1040. There is another IRS form you can do instead that lets you subtract tax paid to the Canadian government from the net taxes on your 1040. You can choose which one to use, but you can only use one of them in a given year.