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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13594
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am a US citizen living in the us but working for a Canadian

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I am a US citizen living in the us but working for a Canadian Company. When I started they gave me a choice either to have them pay the US taxes or pay me through a a US shell corp. which in turn would pay me. My accountant recommend the shell company. All my paperwork says I am an employee of the canadian company. Should they be paying canadian taxes, retirement, etc. on the money they send to the shell company. Clearly the intent was that I was to a direct employee.

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
Not for your employment. The Company that you are working for is effectively a US company. You are working in the US and not in Canada. You would have no Canadian tax obligation.

Robin D. :

Their tax on profits would be a situation for the company in Canada but that is differnet then the arrangement for you in the US.

Customer:

My canadian attorney says my employment contract I signed was clear the intent was to be a direct employee and therefore have the rights of a canadian citizen.

Robin D. :

That would be different then a tax situation. As far as taxes are concerned, your obligations are all in the US. U.S. citizens, resident aliens, and nonresident aliens employed within the United States by a foreign employer are generally subject to Social Security and Medicare tax withholding by the foreign employer. Revenue Ruling 92-106, 1992-2 C.B. 258 provides detailed information on this subject.
If the Canadian company opened a US company to hire you in the US and your question is not just about taxation for you in the US or Canada then you may need to explain to me further.

Robin D. :

If you, by the statement "rights of a canadian citizen" are trying to apply principles for exclusion of your income please let me know.

Customer:

They let me go after 13 years and are not paying any severance. Nor are they paying my remaining commisions.

Robin D. :

Then you have a grievance that does not pertain to taxation. If you have retained an attorney in Canada I would suggest you continue to work with them as this is a legal matter.

Customer:

thank you.

Robin D. :

You are most welcome

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