Filing Status - US or Canada - Both really


Used to work as a Statutory Employee via the Internet for an Employer in Salt Lake City (80 miles away), Utah USA.

In August 2006 we moved to BC, Canada (landed immigrant), and I continue to work for the same company via Internet and telephone.

Statutory Employee in the U.S means an employee who works from home and at own hours but is supervised by the employer. This fact is indicated on the Employee W2 and the employee files Schedule C 'Profit & Loss from Business' i.e. declaring the W2 income as business Income.

Since, I have moved to Canada they deduct staright 30% payment to non-resident tax from my pay-check. And issue a W2.

What I Want:

I wish to contribute into the CPP.

I do not want to fall under registration for GST/PST

I wish to claim home-use expenses, as I work from home into their Servers.

I wish to claim Foreign Tax credit both for the Federal and the BC tax returns (from the 30% withholding).


Under what filing status should I file my 2006 Tax Return? Salaried or Self-employed?

david ingram replies:

If you are self-employed, neither your Canadian nor US returns are due until June 15th so don't get in a rush.

Your first tax liability after you moved to Canada is to Canada.

If they are paying you while you work in Canada, they should NOT be deducting any US tax let alone 30%.

If you are self employed in Canada you have to pay into the CPP and can NOT pay into US social Security.

You are not entitled to any foreign tax credit from the 30% withholding because you do not owe the US any tax for that period.

If they are just deducting tax and no FICA and Medicare, you are self-employed.  If they are still dedcuting Medicare and FICA, they are in error because you are not working in the US.

I think from this brief bit that you are self employed.  That means that if you are billing over $30,000 a year you HAVE TO be registered for GST.