working on a TN and 1099 -

Hi David,

I understand that a TN Visa holder sponsored by the U.S. company (XXXXXXXXX) can not have the U.S. company pay his Canadian company as a 1099, but only as a W-2.  My question is this:  What if the Canadian contractor opens a U.S. based company (XZY company), would the U.S. company still be able to sponsor the TN Visa and then pay the Canadian contractor as a 1099 through his U.S. based company?

I appreciate any insight you might be able to give me.


david ingram replies:

The first condition of getting a TN visa is that the Visa holder can NOT be self employed.

If the Canadian gets a TN visa to work for ABC company, he or she can be paid on a 1099 or a W2 basis.

Getting a 1099 does NOT necessarily mean that one is self-employed under the immigration rules.  What it means is that they are a contract employee without benefits. And, in my opinion, it does not make any sense whatsoever for a Canadian to work on a 1099 basis unless they are commuting back and forth to the employment in the US.  The reason is that if they are living in the US and working in the US, they are now responsible for paying both halves of social security and usually have no medical or other benefits.  A lousy place to be in my opinion.

Since, the visa was issued for the Canuck to work for ABC company, ABC company can only pay that person.  Again, Homeland Security does not care how he is paid, as long as he or she only works for ABC company, does not flash a self-employed business card and is not running around soliciting other business as a proprietor.

Now, the person can have more than one TN.  i have had clients with 8 at one time where they are consulting engineers and working on very complicated things on an occasional basis for multiple people.

The neat part is that if you go to the border with four TN applications at once, only one fee is charged for all four or five or six, etc..

What is not well known is that a Canadian company can get a TN for its employee to work in the US. 

So, if I, for instance, wanted to send a couple of CPA's or CA's across the border to do some work for me, I could apply for TN's for them and they could be working at someone else's place in the USA and that business could pay me and I could pay the CA or CPA or lawyer, etc..

That sounds like your original question's answer would be yes.  However, I can NOT get a TN for myself so if your example owns his own company in Canada or the US, he or she does NOT qualify for a TN.

On the other hand, if there were ten equal shareholders in the company and he was just one of the people working for a company he happened to own 10% of, he would qualify for a TN.

Getting ten friends to help you out by owning shares of a company does not work either if the ultimate mind and control is that of your example.

You do not want to fool around either.  Setting up something to "LOOK" legitimate would be a criminal violation of US immigration law.  You do NOT want to be involved in that stuff.

More on Postville IA raid

Thanks to Citizen Orange for following the Agriprocessors story emanating from Postville, IA. To bring us to this week recall that On May 12 ICE raided the Agriproccessors plant in Postville, IA, said to be with its 1,000 odd employees the largest kosher meat processing facility in the world. ICE arrested 389 workers for illegal status. This was heralded as the largest ICE raid ever.

Several newspapers reported that arrests have begun at the low managerial level for immigration fraud. None of the top executives, including the surrounding the Rubashkin family, from Brooklyn, has been arrested, but I expect that is in the cards, and for offenses which carry serious time in the slammer. The Wall Street Journal reports that one official described the working conditions in the plant as "medieval."

The Wall Street Journal article:

U.S. Arrests 2 Supervisors at Agriprocessors
July 5, 2008

Federal agents Thursday arrested two supervisors at Agriprocessors Inc., a large kosher meatpacking plant, on charges that they helped illegal immigrants secure fake documents and encouraged them to reside in the U.S.

The arrests marked the first by U.S. authorities of individuals in supervisory roles at the Postville, Iowa, plant. On May 12, Immigration and Customs Enforcement agents arrested 389 workers at the facility, most of them undocumented immigrants from Latin America.

Continue reading "More on Postville IA raid" ยป


Hope this helps.


david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST for in person or if you are on the telephone in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no rental
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
A Business for $400 - Rental and business likely $550 to $700
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.


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