Job offer from Canadian Company while in US on a K1

[Clifford27 11]

Hi Everyone,

I am trying to do alittle research on this topic and hoping that there might be someone that has gone through this, just as I am right now.

Just moved to California and on a K1 visa, have my EAD and SSN.

A Canadian Company has approached me about working for them, and are totally fine with me working from California. The biggest issue right now is the discussion was around wanting to pay me in Canadian Dollars (but would compensate for the exchange rate on a monthly basis to make sure I am close a USD amount that we agree on).

First am I allowed to accept a job that is for a Canadian company while living in the US? is it ok for me to be paid in Canadian dollars? lastly what does this do to me from a tax stand point? Do I have to file in Canada and the US? will this cost me more in taxes and ultimately not be worth my while? or can I claim the income thru US taxes at tax time since I leave solely in the US?

Plus maybe things that I should go back to the Company with if I have to negotiate to better my situation

I do plan on speaking to a TAX professional but wanted to see if anyone here has had this situation and maybe had some advice.

Thanks

Edited June 24, 2016 by Clifford27

[NikLR 13,227]

1) yes you can get a Canadian job

2) yes you can be paid in CDN $$

3) Canada and the USA have a tax treaty so you shouldn't be double taxed

4) you would file both a US and a Canadian return. The US return would be as a resident and I think you claim a foreign tax credit, https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-how-to-figure-the-credit, and in Canada you'd claim as a non-resident

I highly suggest Serbinksi tax forums (and the firm) for your issues.

[Clifford27 11]

1) yes you can get a Canadian job

2) yes you can be paid in CDN $$

3) Canada and the USA have a tax treaty so you shouldn't be double taxed

4) you would file both a US and a Canadian return. The US return would be as a resident and I think you claim a foreign tax credit, https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-how-to-figure-the-credit, and in Canada you'd claim as a non-resident

I highly suggest Serbinksi tax forums (and the firm) for your issues.

But if I am filing both who am I actually paying? And with it being a Canadian company do I still pay EI and Canada Pension?

It's so confusing

[NikLR 13,227]

You pay canadian taxes. Im not sure if you pay ei or canada pension.

[Lemonslice 4,851]

But if I am filing both who am I actually paying? And with it being a Canadian company do I still pay EI and Canada Pension?

It's so confusing

You fill the form NR73 from there CRA, they'll determine if you need to pay into EI and CPP.

Then... it really depends on your personal situation. I file with my husband in the US, however my income is non taxable. Then I file with CRA and pay Canadian taxes.

I recommend you use a tax professional the first year you file.

Note that some states do not recognize the treaty - might or might not have an effect on your total tax paid though.

Good read here - https://www.amexpattax.com/news/alleviating-double-taxation-foreign-income-state-level/

Edited June 25, 2016 by Lemonslice

[Clifford27 11]

So I am using my Canadian SIN and not my US SSN?

[Lemonslice 4,851]

US SSN is when you work for an American employer - you are going to be working for a Canadian company, right? Not an American branch of a Canadian company? Then, you use your Canadian SIN. They will prepare your T4 and such at the end of the year.

[Clifford27 11]

US SSN is when you work for an American employer - you are going to be working for a Canadian company, right? Not an American branch of a Canadian company? Then, you use your Canadian SIN. They will prepare your T4 and such at the end of the year.

Correct the company is only in Canada and said they weren't sure they could pay me in American based on not being set up in the US but would pay me in Canadian and make up for the Exchange rate.

[NikLR 13,227]

Will they adjust the pay based on the exchange rate adjustment or just one of you eats it if the exchange rate changes?

Oh and yes, you use your SIN.

Here's the tax firm I referred to earlier btw.. http://www.serbinski.com/ they have an active forum as well.

Edited June 28, 2016 by NLR

[Clifford27 11]

Will they adjust the pay based on the exchange rate adjustment or just one of you eats it if the exchange rate changes?

Oh and yes, you use your SIN.

Here's the tax firm I referred to earlier btw.. http://www.serbinski.com/ they have an active forum as well.

That will be part of the negotiating. Or re adjust every quarter maybe would be my hope

[NikLR 13,227]

Interesting! I hope it turns out the way you want.

[Clifford27 11]

Interesting! I hope it turns out the way you want.

In a perfect world they would adjust per pay period, but I think that will be a lot to ask. So quarterly is a good compromise I think ?

[Lemonslice 4,851]

You can also negotiate an adjustment per % of variation - so if it is minimal, they don't need to do anything, if it changes more than P%, they do. Also, make sure to state which autority will be your reference for the "official" rate; you don't want them to switch from yahoo currency to xe.com, then TD Bank depending on what works for them [bank of Canada is a good pick].

Ex:

"Prices expressed in CAD are converted on the basis of the official exchange rate at the date of signature of the contract [RATE]. If the parity between CAD and USD, based on a 1CAD equals [RATE]USD rate, varies by more than P%, the price shall be automatically and accordingly adjusted monthly/quarterly/etc."

[Clifford27 11]

US SSN is when you work for an American employer - you are going to be working for a Canadian company, right? Not an American branch of a Canadian company? Then, you use your Canadian SIN. They will prepare your T4 and such at the end of the year.

Ok so the company is having some issues getting some sort of approval to hire me.

They don't have any US employees as of yet and are not a registered company in the US.

So what I am trying to find out is if I am going to work for them here in the US and they are going to pay me in Canadian Dollars, is this something I can do or will it cause problems with my green card.

Plus when it comes to taxes, What do I do as the payroll company will want to deduct CPP, EI and other taxes. But not living in Canada do they need to deduct this? And is there a CRA number I can call to get info on this?

It's so confusing

[Lemonslice 4,851]

Ok so the company is having some issues getting some sort of approval to hire me.

They don't have any US employees as of yet and are not a registered company in the US.

So what I am trying to find out is if I am going to work for them here in the US and they are going to pay me in Canadian Dollars, is this something I can do or will it cause problems with my green card.

Plus when it comes to taxes, What do I do as the payroll company will want to deduct CPP, EI and other taxes. But not living in Canada do they need to deduct this? And is there a CRA number I can call to get info on this?

It's so confusing

CRA international tax services, you'll find their number on the CRA website. NR73 will determine what you must pay as far as Canadian taxes and other deductions. I'll try to remember to send you a draft of the letter I sent them.

You will also have to file taxes (not necessarily pay) in the US/ your state