Hi David,
I am a Canadian citizen that live and work in Vancouver for the last 6
years. I am working in the IT industry and has been offered a contract work
in Portland, Maine. The contract will run for 1.5 years with possible
extension to 3 years in total. Contract work remuneration will come from an
American company. I would commute back to Vancouver on the weekends as my
family will continue to live in Vancouver. We are a single income family and
have 3 elementary age children.
Can you provide some details on the following:
1. What is the tax considerations to working 4 days per week in the state of
Maine while my family continues to live in Vancouver, BC? What is the best
way to legally minimize taxes in either US or Canada or both? What are my
tax liabilities in the above scenario?
2. Do you have a rough estimate of my extra medical costs while working in
the US?
I would very much appreciate if you can reply to this question soon for my
contract rates negotiation.
Thanks,
XXXXX
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david ingram replies:
The question is too general to answer. From what you describe, you would be
paying full tax to the United States and full tax to Canada. Canada would
allow a credit for the taxes paid to the United States.
Your BC Medical would likely NOT cover you in the United States unless you
wrote them and asked for permission to be covered under these circumstances.
To be covered, you are supposed to be sleeping in BC more than 183 nights a
year. However, if you can get written permission to be covered by BC medical
because of the temporary nature of the position (they will not usually go
over a year) then you can buy travel insurance which will cover your trips.
If you do no get the written permission from BC Medical and they turn you
down, than any travel insurance is automatically cancelled because it is
based upon your being a member of B C Medical.
I also accept the fact that if you just go, BC Medical would not be aware
and if you had a minor problem, you would likely get away with it. However,
over the years, I have seen people in your position end up with BC medical
cancelling the coverage retroactively and sending bills from $8,000 to over
$100,000.
Another problem is the contract nature of the job. Who is going to be
paying for the airplane fares back and forth.
Back and forth expenses are not deductible where you are living here and
commuting to a job which you have accepted in another area. It is different
when you are working here and your company arbitrarily assigns you to
another area on a temporary basis.
That temporary assignment means that the company can pay for your travel.
And, if you live north of the 60th parallel or other isolated areas, there
is specific legislation providing for limited expenses for up to six trips
"outside".
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