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We have three Canadians working in the US since Jan 2003, being paid by the US company, are not contributing to the US SS and want to contribute the maximum into CPP. All three earn well over the 39,000.
Do we the Canadian Company simply file a T4 and T4 summary for those 3 employee's, if not do you know what forms we need to obtain to remit.
Thanks
WXXXXXXXXX
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david ingram replies:
What a neat background for your question:
I am presuming that you transferred the employees from canda to your US operation.
When you do this under an L1 visa and the job is supposed to be a temporary one for less than 5 years in the United States, the company can apply to the US Social Security Administration for WRITTEN permission to exempt that employee from FICA (social Security) deductions because it is the intention of the Canadian Employer to pay the CPP contributions and continue the employee on CPP.
I personally do not approve of the process because more than half L1 visa holders end up wanting to stay in the USA and end up with smaller pensions in the end.
However, "IF" you have written permission, you should just have the Canadian Company issue a T4 for the employees. The income would be the Total amount paid and the CPP would be the normal amounts. You would logically have deducted the employee's share from the US payroll and remitted it to your Canadian Head Office in Surrey.
This only applies to TRANSFERRED employees. If any of the three are new hires and are there on a TN or H1B visa, this does not apply and your US office has to deduct and pay US Social Security for them.
Your employees then have to prepare their US returns. Hint! You can save rthem a lot of problems by just hiring us to do the US returns and any Canadian returns for them. Dual country tax returns for transferred employees are a nightmare that they do not need. You will have happier people if you foot the charges for them and arrange for them to be done properly.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
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[email protected]
www.centa.com www.david-ingram.com
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This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
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