Canadian resident working for US company


I am a Canadian Resident residing in Canada. I am employed by a US company out of New York, USA. I will be paid in Canadian dollars. I would like to know what taxes will be cut on my salary? Will both US and Canadian tax laws apply?

david ingram replies:

If you are living in Canada and working in Canada, you will only pay Canadian tax and CPP.

If you are living in Canada and commuting to work in New York state, you will pay New York State tax, Social Security Tax, Medicare Tax  and US federal Tax first and then report all the income  again in Canada on lines 104 and 433 of your Canadian tax return.  You will then claim credit for the medicare, social security New York sate taxes and federal tax on line 431 (use form T2209 to calculate) of schedule 1 of your Canadian return.  If there is any left over, you can claim the excess on line 48 of the provincial schedule 428 of your Canadian return unless you are in Quebec in which case you have to use form TP-772-V and put the result on line 409 of Schedule E of your Quebec TP1.  In the rest of Canada, use form T2036 (provincial) to calculate the actual amounts for the provincial credit on line 48 of schedule 428. �