Working for Canadian Company

[MichelleMcK 0]

My fiancé's company (that he works for currently) wants him to work remotely (through his computer) when he moves to the U.S.

Is this legal? He would still claim taxes, but just be doing basically the same job, but in the states.

[Lona.C. 16]

My fiancé's company (that he works for currently) wants him to work remotely (through his computer) when he moves to the U.S.

Is this legal? He would still claim taxes, but just be doing basically the same job, but in the states.

to my understanding this is not legal , once you arrive in the states with k1 visa you are not aloud to work till you file your aos and you eather have the EAD card or your green card , yes some say k1 is work authorized , but only for 90 day and with the stamp ,

so my advice is as soon as he comes file for SSN , get married file the aos waite for the EAD card or green card wich ever comes first , then hes legal status to work here in the us good luck

[payxibka 10,045]

Is the or could the Canadian company also be considered a US employer? Do they have US based operations and regular US based employees?

[MichelleMcK 0]

Is the or could the Canadian company also be considered a US employer? Do they have US based operations and regular US based employees?

No. They do not have US based operations, they are only Canadian.

I do not understand why this would be a problem, because he is working for a CANADIAN company, not an American company....

[payxibka 10,045]

Is the or could the Canadian company also be considered a US employer? Do they have US based operations and regular US based employees?

No. They do not have US based operations, they are only Canadian.

I do not understand why this would be a problem, because he is working for a CANADIAN company, not an American company....

Where a company is incorporated is meaningless as any company in the world can be a US EMPLOYER.... It is an important distinction....

[Krikit 1,163]

I did it, and so did a lot of others. It's not illegal. Though you'll find many on VJ who will argue the point. Some feel they are experts in things which they have no expertise or background in. Suffice it to say they are wrong and don't even bother arguing the point.

The EAD only authorizes work for an American employer. The US has no jurisdiction for authorizing employment for a Canadian-based company. Just make sure the Canadian company knows he's a non-resident so he gets taxed appropriately, then claim that income in both your US and Canadian tax return. Easy peasy.

[MichelleMcK 0]

I did it, and so did a lot of others. It's not illegal. Though you'll find many on VJ who will argue the point. Some feel they are experts in things which they have no expertise or background in. Suffice it to say they are wrong and don't even bother arguing the point.

The EAD only authorizes work for an American employer. The US has no jurisdiction for authorizing employment for a Canadian-based company. Just make sure the Canadian company knows he's a non-resident so he gets taxed appropriately, then claim that income in both your US and Canadian tax return. Easy peasy.

Thank you Krikit. That is what I understood. I'm glad someone knows what they are talking about

[payxibka 10,045]

I did it, and so did a lot of others. It's not illegal. Though you'll find many on VJ who will argue the point. Some feel they are experts in things which they have no expertise or background in. Suffice it to say they are wrong and don't even bother arguing the point.

The EAD only authorizes work for an American employer. The US has no jurisdiction for authorizing employment for a Canadian-based company. Just make sure the Canadian company knows he's a non-resident so he gets taxed appropriately, then claim that income in both your US and Canadian tax return. Easy peasy.

I do not know what others experience (maybe they slept at a Holiday Inn Express) but I am a finance director for a 4.5 billion dollar multi-national corporation with 9000 employees in both the US and Canda. I understand completely what it is to be a Canadian Employer and a US Employer and how that is different from being just an American Company.

Even the USCIS goes and uses the term US Employer (See below)

What is an Employment Authorization Document?

U.S. employers must check to make sure all employees, regardless of citizenship or national origin, are allowed to work in the United States. If you are not a citizen or a lawful permanent resident, you may need to apply for an Employment Authorization Document (EAD) to prove you may work in the United States.

http://www.uscis.gov/portal/site/uscis/men...00045f3d6a1RCRD

Edited September 18, 2008 by payxibka

[sly_wolf 199]

I did it, and so did a lot of others. It's not illegal. Though you'll find many on VJ who will argue the point. Some feel they are experts in things which they have no expertise or background in. Suffice it to say they are wrong and don't even bother arguing the point.

The EAD only authorizes work for an American employer. The US has no jurisdiction for authorizing employment for a Canadian-based company. Just make sure the Canadian company knows he's a non-resident so he gets taxed appropriately, then claim that income in both your US and Canadian tax return. Easy peasy.

I concur with Krikit.

Sly

[zyggy 9]

WHat this means is that you are essentially self-employed...

In my opinion as a tax advisor and someone who has been in the immigration arena, I would be very diligent on whether this situation as described runs afoul of US Tax and US Immigration law. In the situation you describe, in the eyes of tax law, you most likely will be viewed as a contractor to the Canadian firm and would be responsible for paying US Income and Self-Employment taxes on the contractual income. If tax law sees you as self-employed, in terms of US Immigration law, would you be considered your own US Employer?

I can't answer that.. only a court of law can. Are you willing to risk losing what you have tried to gain, either through tax or immigration consequences. Beware of persons telling you to go ahead and do it. Remember that in immigration law, the burden of proof in an administritive law court situation is much lower than in an actual court of law. In Civil and Criminal law, the burden of proof is on the government to prove that one does not qualify for the benefit. In Immigration, the burden of proof is on the applicant to prove that they qualify for the benefit. A very important distinction. In immigration law, you are essentially guilty until you prove yourself innocent.

I cannot tell you what to do, I can only alert you to the risks of what you propose and the consequences for doing so, but I would do a lot more due diligence that just following what some people state on a discussion board. You must make find the right resources (a qualified tax and immigration attorney would be one), analyze the facts and make your own decision.

Edited September 18, 2008 by zyggy

[jedinite 0]

One way around this ordeal is if your fiance is an owner of his own corporation, it only costs a few hundred to incorporate yourself. So the company that he works for will essentially just pay his company and not him. As an owner of the shares of the company he can take shareholder loans and dividend payments. Thus his company would get paid, and the money would sit in his business account, he could then take a "shareholder loan" to himself and pay it back when he takes a dividend payment later on in the year, like the following quarter when he has his EAD. Is this legal?

Well since he's a shareholder of a company he's not working, his company is. He is not making salary, unless he sets up his company that way and you aren't required to set up salary when you incorporate right away unless you actually have other employees you are paying.

The income from dividend payments will have to be recorded with his tax returns to both countries but I believe since he's considered a non-resident you don't need to pay Canadian taxes, you'll just pay what you owe the IRS. Also getting paid corp-to-corp he must charge and remit GST to the Canadian gov't from his company, and he won't have to pay taxes until June I believe, you can actually defer your tax payment for up to 53weeks I believe when you open a new company. Since he's company gets all this money pre-tax, make sure he doesn't transfer it all into his personal account since that will mean he owes the appropriate amount of tax back to Canada Revenue Service.

Finally, I was told from my accountant that you can take up to 30K or 35K in dividend payments from your corporation so you pay business tax on your revenue but you are able to avoid personal tax for that amount. Since business tax rate is around 16% it's better than paying 30% on personal tax rate. Only thing you'll have to realize is that whatever he takes as income he'll have to file with the IRS and whatever he didn't pay to Canada on income he may have to pay to the IRS.

But as Zyggy says, it's best to check with legal council to see what the deal is. Or perhaps try calling the NVC but don't give them your name or case number so they can't really keep an eye out for your fiance and flag him for working illegally.

[Kathryn41 3,205]

Try this scenario - it was mine.

When I moved to the US I had 6 weeks of vacation time and overtime hours (time off in lieu) due to me so I remained on the payroll for 6 weeks after I moved to the US. I received regular paycheques from my employer, was still covered under their health plan (and for a month after my 'final date of employment'), still made contributions to CPP, EI and my pension. Of course I declared everything on both my Canadian and US tax returns using foreign tax credits to cancel out the double taxation. As a theoretical question, how was I supposed to handle this situation if working for a Canadian employer while in the US is not kosher? Not move to the US until 6 weeks later? Forego the 6 weeks of pay owed to me? Not bloody likely!.

It seems rather ridiculous to state that the US EAD has to apply for Canadian employment. US work visas are to protect US employment and do not apply to non-US employment. Does the US expect they will then send an American to take the workplace of the Canadian who is relocating to the US but still has Canadian employment, especially as it is a continuation of existing employment? There is, in fact, an option in the Affidavit of Support where someone can self-sponsor if they maintain the same source of income after they immigrate as prior to immigration, so this would not be included if it was such a bugaboo for immigration.

Certainly there will be tax implications but I cannot see how there would be immigration implications. There are a number of Canadians resident along the US border who commute to Canada every day to work - and who did not interrupt their employment while undergoing the immigration process. US authority does not extend outside of the US boundaries - and these individuals are NOT working in the US nor taking a job away from a US citizen.

[sly_wolf 199]

Wow, this got complicated. I guess I was looking at this too simplisticly. I do fully agree there are tax issues that need to be properly addressed. No biggie as long as it's done correctly to satisfy IRS and/or Revenue Canada requirements. You want to make sure you also don't get double taxed. Do consult with a good tax accountant.

I still don't agree that it is illegal for him to work for a Canadian company while living in the US. My understanding is also that he is legally living in the US.

On the other hand if he was visiting temporarily I also dont see the issue. Many people visit the US on business or even vacation and are still connected to work with their foreign company.

Sly

[Reba 2]

I was told on more than one ocasion by US CBP and Immigration officials that if you are physically on US soil and workig, you must have US work authorization, no matter who is paying you or in what currency or from what country.

[sly_wolf 199]

I was told on more than one ocasion by US CBP and Immigration officials that if you are physically on US soil and workig, you must have US work authorization, no matter who is paying you or in what currency or from what country.

Again, these statements would be based on an interpretation or misinterpretation of facts or words. If this is taken literally many people travelling to the US for whatever legitimate reason could be breaking US immigration laws. With today's technology, the ability to connect remotely to their foreign employer's network is done without any second thought.

The intent of the law is to protect US jobs and I just dont view this as being the case here.

Sly.