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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I work for a company in Canada who has a contract with a firm

Resolved Question:

I work for a company in Canada who has a contract with a firm in the US. I am paid in Canada and live on a TN visa in the US and will stay for several months. Can I pay my taxes only in Canada? is there anything else I am supposed to pay in the US? I have my social security and health insurance in Canada, the length of my stay in the US in not determined
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello claudie,

When did you first come to the US to live?

Customer: replied 7 years ago.
I entered on this visa las week and live in California
Expert:  Merlo replied 7 years ago.
Hello again claudie,

You will have to file a tax return with the US and report the income that you earned while you were here. The type of return you will file will depend on how long your stay is in the US.

If you stay in the US for more than 183 days in a 3 year period of time, then you are considered to be a resident alien for tax purposes, and you are subject to all of the same tax requirements as US citizens.

If your stay in the US is less than 183 days, then you will still file a return with the IRS, but will file as a non-resident.

The US does have a tax treaty with Canada to prevent double taxation of the same income, so you will be given a credit on your Canadian tax return for any tax that you end up paying here in the US.

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Thank you.
Customer: replied 7 years ago.
Thanks Merio. I have the hardest time to figure what is best and less complicated for me. I changed contractor since last time and I am starting with the new one this morning. I want to set it right from the beginning so asked him to send the money of the contract to Canada. I do not want to be his staff and I need to have an income in Canada to make a loan in the future. Complicated!
Expert:  Merlo replied 7 years ago.
Hello again claudie,

If you are working for a contractor here in the US who will be sending the payments on your behalf to Canada, then the contractor is obligated to withhold 30% tax from those payments to cover your federal tax obligations. The contractor you are working for may or may not be aware of these requirements.

If the contractor does withhold the required tax, then when you do eventually file your US return next year, you will be given credit for the taxes already withheld from these payments. If the contractor does not withhold any tax, then when you file your US return next year, you will end up owing the full amount of any tax that might be due.

I know it probably seems like a complicated issue for you at this point, but the botXXXXX XXXXXne really is that you will only end up paying tax to one country on the income you earned, because of the taxation agreement that the US and Canada have in place. It will just be a matter of filing a tax return with both countries, and it is more of a paperwork issue than anything.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

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