Living in US - commuting to Canada -

To which country will I owe income taxes?If I pay taxes to Canada and the rate is higher than my US rate, is there a way to recover the difference?

---------------------------------------------------------------------------david ingram replies:

You will be taxable in Caanda first on any earnings earned in Canadabut if you are telecomuting the rest of the year, the US will havefirst claim for tax on the money earned in the US.  It would be handyif you could get your company to identify the split for you and issue aT-4 slip for the time worked in Canada and a second T-4 slip withotCanadian income tax deducted for the time you are working in the US.

The tax, CPP and EI you are pay to Canada will be a foreign tax crediton form 1116 of your US return. However, if the company withholds fulltax for a whole year when you only worked 40% of the time in Canda, youwill have to wait fro your Candian tax refund while having to pay tothe US and have cash flow problem.

There is no provision to get a refund if the tax is higher in Canada. However, depending on marital status, number of children, etc., the taxin the US for a single person without a mortgage is usually higher inthe unless you are living in a tax free state like Texas orFlorida.  If you are a sinlge wage earner in a US family with two orthree children and a big morgage, the tax is lower in the US.

However, we can average this out as well by rearranging affairs to makea Canadian mortgage tax dedcutible as well. See the November 2001newsletter at (top left hand box)
These older questions might help and others in the future will give yousome ideas.

I start working for a Canadian company next week.  I am living in Washington state and have legal resident status.  I am a Canadian citizen. Do I pay Canadian taxes only on the income earned?  Or do I pay both US and Canadian taxes?  Any advice would be greatly appreciated.
david ingram replies:

You will file your Canadian return first and pay taxes to Canada. Then, as a US resident, you will report the money again and claim aforeign tax credit on form 1116 or your US 1040.  the foreign taxcredit will consist of the Federal and Provincial taxes plus the CPPand EI you paid.

You should not continue with BC Medical or have a BC driver's licenceanymore if you are moving to the US or already living there.

You must buy Washington State Blue Cross or its equivalent.  For BCmedical to be valid (even if you pay premiums or are working in thedaytime in BC and it is being paid by your BC employer), you must sleepin Canada. It is not good enough to be working full time in Canada andpaying full  taxes to Canada; you MUST live in Canada.  You can NOTkeep your green card AND BC Medical at the same time unless you file USform I-131 with US Immigration and move back to Canada to keep theCanadian medical alive and keep your green card.
This might help as well.

My_question_is: Applicable to both US and Canada
Subject:        Canadian, US Perm Res, working in Canada
Expert:         [email protected]
Date:           Monday January 14, 2008
Time:           05:48 PM -0000


I am a Canadian citizen with US resident status, working full time inCanada.

1.  Will my only tax paid, to both countries be paid to Canada throughpayroll tax?
2.  Do I have to file a US tax return?
3.  Am I eligable to pay a reduced tax rate to Canada?
4.  Investment company in Canada is refusing to allow me to set up apayroll RRSP deduction in which I am matched by the company I workfor.  Can they do this?
5.  If I am required to cancel my OHIP health coverage in Canada, am Ientitled to a tax reduction that would normally be designated to thatcoverage?


david ingram replies;

I assume that you are living in Detroit and working in Windsor orLiving in Bellingham and working in Vancouver or something to thateffect.

If  that is so, you can participate in a company pension plan butmatched RRSP contributions are difficult because the financial companyhandling it for your employer is not licenced to sell to or deal witha  non-resident of Canada .

1.   You will pay Canadian Income Tax, CPP and EI.  You will thenreport the same income to the USA on a 1040 and claim credit for thetaxes paid to Canada on US form 1116.  It is unlikely that you will owethe US more on the wages but you might if you have other investments inthe USA.

2.   YES

3.   NO

4.   As explained, the company is not licenced to deal with you as anon-resident.  I will give the names of two people who can work withyour company to set it up for you.

5.   NO  - You have to sleep in Ontario more than 153 days a year toqualify for OHIP.  You could live in Ontario for 155 days and the USfor 210 days and keep OHIP AND your US resident alien (green) cardalive. (Ontario is the only province with 153 days - all otherprovinces and all three territories require you to be there 183nights.) Therefore, Ontario is the only province that you can legallyarrange yiuor affairs to have both a valid Green card AND a validProvincial OHIP card).

This gives you the names of two people who can solve your RRSP problem.

Two ethical people who specialize in selling securities, RRSPs, etc.,to US citizens or green card holders in Canada or Canadians in the US are:

Mr Darrell Thompson
Blackmont Securities
Local    (416) 874-8007
LD        (866) 775-7704


Dan Walkow
Seabank Financial
White Rock
Local     (604) 541-9952
L D        (866) 541-9952
These two individuals and their companies have gone to the effort toget themselves registered just about everywhere so they can deal with aCanadian in Florida or California or Nevada, or an American in Ontarioor BC., etc.

Note that because of their specialty, they tend to deal with accountsin excess of $200,000

However, I am sure that both parties would welcome an exploratory call.

-I am currently living in Illinois.  I am about to come off ofmaternity leave from my Toronto company and I
intend to continue to work for them through the internet.  My USimmigration has not gone through yet.  Do I
 need to wait until I have US status to work or can I start rightaway since I'll be working only for my Canadian
david ingram replies:

You can telecommute. You will owe tax to the US NOT Canada.

You might want to send the returns here.

 This older question should help as well

[email protected]: Please see bottom of message if you wish to unsubscribe.------------------------------------------


Hi David,

I am a TN visa holder working in Seattle, and my wife is on a TD visaand she is citizen of China. We are determined as non-resident toCanada.

Can she telecommute from the US, and providing software consultingservice to Canadian company? Is she allowed to work remotely whilebeing a TD visa holder?

Does she need to file taxes to CRA?

Thank you very much.

david ingram replies:

She is not supposed to take a job away from a legal US resident.

Telecomuting to Canada does not take a US job away and should not be aproblem. 

The Canadian Employer should not withold any Canadian tax either.

She does NOT owe tax to Canda if she provides all her services from theUSA.

She will / does owe tax to the US on the earnings and it should bereported on a schedule C on your joint 1040 US tax return.

She will also owe FICA (Social security tax) and should. send in formSE as well.

On February 11, 2008, DavidIngram wrote:

It is very unlikely that blind or unexpected email to me will beanswered.  I receive anywhere from 100 to 700  unsolicited emails a dayand usually answer anywhere from 2 to 20 if they are not from existingclients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject lineand get answered first.  I also refuse to be a slave to email and donot look at it every day and have never ever looked at it when I am outof town. 
e bankruptcy expert  US Canada Canadian American Mexican Income Tax  service and help
However, I regularly search for the words"PAYINGCUSTOMER" and always answer them first if they did not get spammed out.For the last two weeks, I have just found out that my own email notesto myself have been spammed out and as an example, as I wrote this onDec 25, 2007 since June 16th, my 'spammed out' box has47,941 unread messages, my deleted box has 16645 I have actually lookedat and deleted and I have actually answered 1234 email questions forclients and strangers without sending a bill.  I have also put aside847 messages that I am maybe going to try and answer because they lookinteresting. -e bankruptcy expert  US Canada Canadian American Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to48 hours, it is likely lost in space. You can try and resend it but if important AND YOU TRULY WANT OR NEEDAN ANSWER from 'me', you will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, LosAngeles) time at (604) 980-0321.  david ingram expert US Canada Canadian American  Mexican Income Tax  service and help.
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 -
(604) 980-0321 Fax (604)980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time -  (please do not fax orphone outside of those hours as this is a home office) expert  US Canada Canadian American Mexican Income Tax  service help.
Disclaimer: This question has been answered without detailed information orconsultation and is to be regarded only as general comment.   Nothingin this message is or should be construed as advice in any particularcircumstances. No contract exists between the reader and the author andany and all non-contractual duties are expressly denied. All readersshould obtain formal advice from a competent andappropriately qualified legal practitioner or tax specialist for experthelp, assistance, preparation, or consultation  in connection withpersonal or business affairs such as at If you forward this message, this disclaimer must beincluded." e bankruptcy expert  US Canada Canadian American Mexican Income Tax  service and help.
David Ingramgives expert income tax service & immigration help to non-residentAmericans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out ofcountry investments are all handled with competence & authority.
Phone consultationsare $450 for 15 minutes to 50 minutes (professional hour). Please notethat GST is added if product remains in Canada or is to be returned toCanada or a phone consultation is in Canada. ($472.50 with GST if inCanada) expert  US Canada Canadian American MexicanIncome Tax  service and help.
This is not intended to be definitivebut in general I am quoting $900 to $3,000 for a dual country taxreturn.
$900 would be one T4 slip one W2 slipone or two interest slips and you lived in one country only (but werefiling 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 onerental
$1,300 would be the same with onebusiness no rental
$1,300 would be the minimum with amove in or out of the country. These are complicated because of theback and forth foreign tax credits. - The IRS says a foreign tax credittakes 1 hour and 53 minutes.
$1,600 would be the minimum with arental or two in the country you do not live in or a rental and abusiness 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 andyou 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 andno capital gains, etc. for $200.00 up.
With a Rental for $400, two or threerentals for $550 to $700 (i.e. $150 per rental) First year Rental -plus $250.
A Business for $400 - Rental andbusiness likely $550 to $700
And an American only (lives in the USwith no Canadian income or filing period) with about the same things inthe same range with a little bit more if there is a state return.
Moving in or out of the country orpart year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for thefirst 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 - (maybeamalgamate 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 theCanadian return as a guide for seven years at a time will be from $150to$600.00 per year depending upon numbers of bank accounts, RRSP's,existence of rental houses, self employment, etc. Note that thesereturns tend to be informational rather than taxable.  In fact, ifthere are children involved, we usually get refunds of $1,000 per childper year for 3 years.  We have done several catch-ups where the clienthas recieved as much as $6,000 back for an $1,800 bill and one recentlywith 6 children is resulting in over $12,000 refund. 

This is aguideline not etched in stone.  If you doyour own TDF-90 forms, it is to your advantage. However, if we put themin the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service andimmigration expert" from or or David Ingram deals on a daily basis with expatriate taxreturns with multi jurisdictional cross and trans border expatriateproblems  for the United States, Canada, Mexico, Great Britain, UnitedKingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan,China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia,Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida,Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan,Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, StVincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 stateswith state tax returns, etc. Rockwall, Dallas, San Antonio Houston,Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax andImmigration Tips, Income Tax  Immigration Wizard AntarcticaRwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6Non-Resident Real Estate tax specialist expert preparer expatriate antimoney laundering money seasoning FINTRAC E677 E667 105 106TDF-90 Reporting $10,000 cross border transactions Grand Cayman ArubaZimbabwe South Africa Namibia help USA US Income Tax Convention. Adviceon bankruptcy  e bankruptcy expert  US Canada Canadian American Mexican Income Tax service and help .

David Ingram expert income tax service and immigration help andpreparation of US Canada Mexiconon-resident and cross border returns with rental dividend wagesself-employed and royalty foreign tax credits family estate trust trusts
income tax convention treaty advice on bankruptcy

New York, Boston, Sacramento,Minneapolis, Salem, Wheeling, Philadelphia, Pittsburgh, Atlanta,Pensacola, Miami, St Petersburg, Naples, Fort Myers, Cape Coral,Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay, Minot,Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City,Tulsa, Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello,Bellingham, Custer, Grand Forks, Lead, Rapid City, Mitchell, KansasCity, Lawrence, Houston, Albany, Framingham, Cambridge, London, Paris,Prince George, Prince Rupert, Whitehorse, Anchorage, Fairbanks,Frankfurt, The Hague, Lisbon, Madrid, Atlanta, Myrtle Beach, Key West,Cape Coral, Fort Meyers,   Berlin, Hamburg,  Warsaw, Auckland,Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing, Shanghai, Tokyo,Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds, MedicineHat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey,Edinburgh, Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney,Nanaimo, Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne,Zurich, Kyoto, Nanking, Rio De Janeiro, Brasilia, Colombo, BuenosAries, Squamish, Churchill, Lima, Santiago, Abbotsford, Cologne,Yorkshire, Hope, Penticton, Kelowna, Vernon, Fort MacLeod, Deer Lodge,Springfield, St Louis, Centralia, Bradford, Stratford on Avon, NiagaraFalls, Atlin, Fort Nelson, Fort St James, Red Deer, Drumheller,Fortune, Red Bank, Marystown, Cape Spears, Truro, Charlottetown,Summerside, Niagara Falls, income trust, Income Tax Treaty Convention. - e bankruptcyexpert  US Canada Canadian American  Mexican Income Tax  service andhelp.
davidingramInternational non-resident cross border expert income tax service &immigration help estate family trust assistance expert preparation& immigration consultant, income trusts experts on rentals mutualfunds RRSP RESP IRA 401(K) & divorce preparer preparersconsultants Income Tax Convention Treaty.  adviceon bankruptcy expert  US Canada Canadian American  Mexican Income Taxhelp.
Be ALERT,  the world needs more "lerts".   bankruptcy expert  US CanadaCanadian American  Mexican Income Tax service help.  -expert us Canada Canadian Mexico income taxservice and help  help