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Canadians Working in America

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  • Feb 14th, 2022 9:48 am
[OP]
Deal Fanatic
Mar 15, 2005
5720 posts
1292 upvotes

Canadians Working in America

Hey everyone, just got my first US job offer in NYC. Company is sponsoring me for a TN visa so nothing is officially signed yet but I wanted to start a thread for Canadians working in the US and just things to look out for tax wise, recommended banks / credit cards, etc

My team is going to allow me to work largely remote so I will only need to spend 1-2 weeks a month in NYC. Will probably be looking at hotels over getting an apartment unless I found a real deal.

Anyone else here in a similar scenario? Any tips or advice that can be shared?
48 replies
Deal Fanatic
User avatar
Nov 6, 2010
9931 posts
1879 upvotes
Montreal, QC
Are you going to be considered Canadian or American for tax purposes? If you're switching over to the US, you'll need to pay departure tax. Either way, check residency requirements for both Canada and the US especially if you're doing what seems to be a less than 50/50 split...

A few things I learned while going through the process:
- TFSAs are not recognized by the IRS so you either sell them before you "leave" or you report any income (dividends, capital gains, etc) to the IRS and get taxed on it. Likewise the Roth IRA (US-equivalent of the TFSA) is not recognized by the CRA so if you plan on retiring in Canada long term and accumulate stuff in there, you will get taxed on it.
- Both governments recognize retirement accounts so IRAs and 401Ks can be transferred over to RRSPs without a huge consequence
- If you have a rental property in Canada, you'll need to remit 25% of gross rental income to the CRA monthly. You can however declare expenses and the CRA will refund you an amount. There is a way to "pre-emptively" declare your expenses (especially if they're recurring like taxes/interest rates etc.) and only remit 25% of the net rental income every month instead of gross.
- You'll have no credit in the US so the easiest way to build is either get a US credit card with a Canadian bank that has US operations, or use AMEX's Global transfer program if you're a current AMEX customer.
- If you're on a TN, you're eligible to get a SSN so make sure you schedule that it just makes everything else a lot easier
- If you plan on doing something longer term, the path to it is via the H1B not TN which is a temporary non-immigrant intent visa
[OP]
Deal Fanatic
Mar 15, 2005
5720 posts
1292 upvotes
uber_shnitz wrote: Are you going to be considered Canadian or American for tax purposes? If you're switching over to the US, you'll need to pay departure tax. Either way, check residency requirements for both Canada and the US especially if you're doing what seems to be a less than 50/50 split...

A few things I learned while going through the process:
- TFSAs are not recognized by the IRS so you either sell them before you "leave" or you report any income (dividends, capital gains, etc) to the IRS and get taxed on it. Likewise the Roth IRA (US-equivalent of the TFSA) is not recognized by the CRA so if you plan on retiring in Canada long term and accumulate stuff in there, you will get taxed on it.
- Both governments recognize retirement accounts so IRAs and 401Ks can be transferred over to RRSPs without a huge consequence
- If you have a rental property in Canada, you'll need to remit 25% of gross rental income to the CRA monthly. You can however declare expenses and the CRA will refund you an amount. There is a way to "pre-emptively" declare your expenses (especially if they're recurring like taxes/interest rates etc.) and only remit 25% of the net rental income every month instead of gross.
- You'll have no credit in the US so the easiest way to build is either get a US credit card with a Canadian bank that has US operations, or use AMEX's Global transfer program if you're a current AMEX customer.
- If you're on a TN, you're eligible to get a SSN so make sure you schedule that it just makes everything else a lot easier
- If you plan on doing something longer term, the path to it is via the H1B not TN which is a temporary non-immigrant intent visa
I believe the residency test is somewhere around 183 days and I plan on spending far fewer than that. I would expect all in that it would be less than 100 days a year based on the arrangement I have with my employer. I fully expect to be deemed a Canadian resident for taxation purposes going forward

I don't expect this to be a long term thing so I won't be chasing H1B. Girlfriend doesn't want to live in the US or relocate to USA so the plan is I just work there weekdays a couple weeks a month

I will likely only be using 401k based on what I understand of the compensation plan, happy to hear that is easily transferable to RRSP long term. I assume that the exchange of USD to CAD will all get factored into my RRSP contribution room etc?
Deal Fanatic
User avatar
Nov 6, 2010
9931 posts
1879 upvotes
Montreal, QC
Ziggy007 wrote: I believe the residency test is somewhere around 183 days and I plan on spending far fewer than that. I would expect all in that it would be less than 100 days a year based on the arrangement I have with my employer. I fully expect to be deemed a Canadian resident for taxation purposes going forward

I don't expect this to be a long term thing so I won't be chasing H1B. Girlfriend doesn't want to live in the US or relocate to USA so the plan is I just work there weekdays a couple weeks a month

I will likely only be using 401k based on what I understand of the compensation plan, happy to hear that is easily transferable to RRSP long term. I assume that the exchange of USD to CAD will all get factored into my RRSP contribution room etc?
If you're planning on staying a Canadian tax resident I'd check with the CRA to see how 401K's play into your contribution room specifically.
Jr. Member
Oct 26, 2014
147 posts
101 upvotes
Colorado
A few items for your consideration:
1. For Banking - there are a number of Canadian banks that have operations in US - I'm with RBC and opened a RBC VISA debit and VISA with RBC USA. You don't need SSN for this, although you can provide the SSN to them when you have it. TD, BMO are other options, depending who you are with in Canada at the moment.
2. Working remote - I believe if you are working for a US company, you need to not only reside in US but in the state where the company have tax provisions with (resident for tax purposes)
3. SSN - I'd suggest calling the local SSA office where you will reside/live in US as soon as you have the TN and the I94, as there might be delays for SSA appointments...and in US you need this SSN for EVERYTHING (get a mobile phone plan, home internet, etc). Last but not least - payroll.
Deal Addict
User avatar
Mar 29, 2008
3865 posts
1018 upvotes
Congrats on the new job OP. 1-2 weeks a mo is basically half and half. I’ll leave the tax stuff to those better qualified but I’d think at the minimum you’ll need an ITIN and an accountant familiar with cross border issues at tax time. I think there’s another thread that has accountant recommendations.

Cell phone - lots of US # options but if you want to keep your Cdn # I think the Telus US/Cda plan is the best. Can call freely and use your data freely on both sides of the border. RFD experts may have other recommendations, but I like the Telus plan.

Credit Card - lots of US options if you end up getting a semi-permanent address or equivalent, or you could use cards like the Rogers MC and Stack for transactions in the US and not have to deal with another financial institution.

Health Insurance - get that sorted through benefits as soon as possible.

Nexus - if you don’t have this already, you should.

Airport Lounges - figure out what works best for you, but this is something I think you’ll use. Again, RFD experts can chime in, but I’ve found the Amex Platinum/Priority Pass sufficient for my needs.
Sr. Member
Sep 28, 2013
793 posts
559 upvotes
uber_shnitz wrote: Are you going to be considered Canadian or American for tax purposes? If you're switching over to the US, you'll need to pay departure tax. Either way, check residency requirements for both Canada and the US especially if you're doing what seems to be a less than 50/50 split...

A few things I learned while going through the process:
- TFSAs are not recognized by the IRS so you either sell them before you "leave" or you report any income (dividends, capital gains, etc) to the IRS and get taxed on it. Likewise the Roth IRA (US-equivalent of the TFSA) is not recognized by the CRA so if you plan on retiring in Canada long term and accumulate stuff in there, you will get taxed on it.
- Both governments recognize retirement accounts so IRAs and 401Ks can be transferred over to RRSPs without a huge consequence
- If you have a rental property in Canada, you'll need to remit 25% of gross rental income to the CRA monthly. You can however declare expenses and the CRA will refund you an amount. There is a way to "pre-emptively" declare your expenses (especially if they're recurring like taxes/interest rates etc.) and only remit 25% of the net rental income every month instead of gross.
- You'll have no credit in the US so the easiest way to build is either get a US credit card with a Canadian bank that has US operations, or use AMEX's Global transfer program if you're a current AMEX customer.
- If you're on a TN, you're eligible to get a SSN so make sure you schedule that it just makes everything else a lot easier
- If you plan on doing something longer term, the path to it is via the H1B not TN which is a temporary non-immigrant intent visa
As someone who just went through the process, this is an excellent summary for people that should frankly be stickied. Woe betide you if you screw up by not liquidating TFSA's (it'll get taxes like a foreign trust and plenty of paperwork, and the IRS will slap you with a $10k fine for non reporting). The one thing I would add with the rental is that you need an 'arm's length' property manager who will take care of the remittance to the CRA on your behalf. They'll usually charge a fee on this. If you want to go the 25% of net rent route, they will have to be financially liable for you, and most will not do that. You can file paperwork to have it proactively assessed at 25% of net when you do your taxes, so you'll get a refund.
Sr. Member
Aug 15, 2018
723 posts
584 upvotes
Hi all - that is probably a dumb question, but is there a way to start building credit score in the US before actually moving there?
Deal Fanatic
User avatar
Nov 6, 2010
9931 posts
1879 upvotes
Montreal, QC
mattnew wrote: Hi all - that is probably a dumb question, but is there a way to start building credit score in the US before actually moving there?
You can get a US credit card from a Canadian bank that has operations in the US (ex: RBC Georgia, TD Ameritrade, BMO Harris) however you'd still need to use and pay off said card in order to build the credit sooo that means making CAD purchases with a USD credit card? Idk if that's the best strategy.

The alternative I used to get a half decent credit card was to use AMEX's global transfer program where they'd use my Canadian credit score + existing AMEX relationship on a one-time basis to swap over to an American credit card.

Credit isn't horribly difficult to build, usually within 6 months to a year you're at a decent level based on what my friends have told me.
Member
Jan 12, 2011
272 posts
191 upvotes
Toronto
Ziggy007 wrote: My team is going to allow me to work largely remote so I will only need to spend 1-2 weeks a month in NYC. Will probably be looking at hotels over getting an apartment unless I found a real deal.
You should consult a lawyer and accountant before doing this. While it might not matter much to your new team or manager, the company itself has to worry about where you live to ensure they are filing your obligated tax requirements, as well as uphold local laws, regulations, and compliance around your employment.

If your permanent place of residence is in Canada. They might have to hire you out of their Canadian corporate entity, or pay you as an independent contractor.

Either way. Check with your assigned lawyer and accountant.
Jr. Member
Nov 2, 2017
190 posts
21 upvotes
What industry do you work in?

Do you work for a large multinational and just got transferred over?
Sr. Member
Aug 15, 2018
723 posts
584 upvotes
uber_shnitz wrote: You can get a US credit card from a Canadian bank that has operations in the US (ex: RBC Georgia, TD Ameritrade, BMO Harris) however you'd still need to use and pay off said card in order to build the credit sooo that means making CAD purchases with a USD credit card? Idk if that's the best strategy.

The alternative I used to get a half decent credit card was to use AMEX's global transfer program where they'd use my Canadian credit score + existing AMEX relationship on a one-time basis to swap over to an American credit card.

Credit isn't horribly difficult to build, usually within 6 months to a year you're at a decent level based on what my friends have told me.
Thanks I didn't know about AMEX
[OP]
Deal Fanatic
Mar 15, 2005
5720 posts
1292 upvotes
cnfjti3 wrote: You should consult a lawyer and accountant before doing this. While it might not matter much to your new team or manager, the company itself has to worry about where you live to ensure they are filing your obligated tax requirements, as well as uphold local laws, regulations, and compliance around your employment.

If your permanent place of residence is in Canada. They might have to hire you out of their Canadian corporate entity, or pay you as an independent contractor.

Either way. Check with your assigned lawyer and accountant.
Does that matter if I am on a non-immigrant TN visa? I thought that visa denoted that you don't intend to live in the US, just go there for the purpose of work
Member
Jun 27, 2007
285 posts
183 upvotes
California
Ziggy007 wrote: Does that matter if I am on a non-immigrant TN visa? I thought that visa denoted that you don't intend to live in the US, just go there for the purpose of work
No - that is not correct. It means you don't tend to permanently live in the US (eg. Green Card). Most people on TN very much live in the US, except for commuters (e.g. Windsor-Detroit).

I would reiterate what cnfjti3 said - you and your company should really consult a tax expert as there seems to be a lack of understanding on both sides regarding the tax implications. If your base is essentially Canada, your company needs to be aware.
Deal Fanatic
User avatar
Nov 6, 2010
9931 posts
1879 upvotes
Montreal, QC
Was your plan to pay the IRS or the CRA? Because that's part of the whole "tax residency" requirements. If you're going to be a Canadian tax resident, the company has to withhold taxes to the CRA which as others have stated, may have other implications.

You can't just get paid and taxed by US standards but remain a Canadian tax resident.
[OP]
Deal Fanatic
Mar 15, 2005
5720 posts
1292 upvotes
uber_shnitz wrote: Was your plan to pay the IRS or the CRA? Because that's part of the whole "tax residency" requirements. If you're going to be a Canadian tax resident, the company has to withhold taxes to the CRA which as others have stated, may have other implications.

You can't just get paid and taxed by US standards but remain a Canadian tax resident.
I assumed I would ultimately have to file documentation with both the IRS and CRA and leverage tax treaties and other avenues to calculate exactly how much is owed to each (with the CRA likely taking an extra cut off the top because of the higher tax rate)

I have a call with an accountant later to discuss and make sure my assumptions were right but from what I have read I fill out a W8 for non-resident alien and 30% taxes are withheld at source, and I would owe the CRA the remainder of my marginal tax rate above and beyond that as a resident of Canada
Deal Fanatic
User avatar
Nov 6, 2010
9931 posts
1879 upvotes
Montreal, QC
Ziggy007 wrote: I assumed I would ultimately have to file documentation with both the IRS and CRA and leverage tax treaties and other avenues to calculate exactly how much is owed to each (with the CRA likely taking an extra cut off the top because of the higher tax rate)

I have a call with an accountant later to discuss and make sure my assumptions were right but from what I have read I fill out a W8 for non-resident alien and 30% taxes are withheld at source, and I would owe the CRA the remainder of my marginal tax rate above and beyond that as a resident of Canada
Also note NY state has a state-tax on top of federal income tax so if you're not planning on being a resident that may be something you need to look into.
Member
Jan 12, 2011
272 posts
191 upvotes
Toronto
Ziggy007 wrote: I assumed I would ultimately have to file documentation with both the IRS and CRA and leverage tax treaties and other avenues to calculate exactly how much is owed to each (with the CRA likely taking an extra cut off the top because of the higher tax rate)
This is correct. However you are only considering the tax portion of this arrangement, you also have to consider local employment rules and compliance (i.e. Canadian rules) the company has to follow for hiring an employee in Canada.

For these scenarios, typically the company will pay you out of their Canadian payroll, if they have one, or pay you as an independent contractor.

Again, talk to your immigration lawyer or company HR. It is not as simple as we're free to work wherever we please.
Deal Fanatic
Oct 25, 2003
9247 posts
360 upvotes
Get hitched, get her on TD Status, move down, and have your newly wed wife not work. The married filing jointly income tax brackets are VERY advantageous in the states.

250k in NYC is 155k after taxes Single
250k in NYC is 172k after taxes Married Filing Jointly
uber_shnitz wrote: - You'll have no credit in the US so the easiest way to build is either get a US credit card with a Canadian bank that has US operations, or use AMEX's Global transfer program if you're a current AMEX customer.
- If you're on a TN, you're eligible to get a SSN so make sure you schedule that it just makes everything else a lot easier
- If you plan on doing something longer term, the path to it is via the H1B not TN which is a temporary non-immigrant intent visa
Amex Global transfer is great advice, used this for my first cc when I moved down.

H1B is not a requirement to apply for Green card. I've had a few friends who have gone directly from TN to Green card, now that they're renewable in 3 year terms, instead of the previous 1 year.

cnfjti3 wrote: This is correct. However you are only considering the tax portion of this arrangement, you also have to consider local employment rules and compliance (i.e. Canadian rules) the company has to follow for hiring an employee in Canada.

For these scenarios, typically the company will pay you out of their Canadian payroll, if they have one, or pay you as an independent contractor.

Again, talk to your immigration lawyer or company HR. It is not as simple as we're free to work wherever we please.
If the company doesn't already have any Canadian presence, they will definitely not go through the hassle of setting up jurisdiction in Canada just to hire the OP.


And OP, Congrats on the job offer.
Sr. Member
Nov 16, 2013
843 posts
293 upvotes
GTA
With Covid, both countries have been struggling to decide how this will pan out as many who got H1B or TN and get paid in US but physically are in Canada due to WFH scenario

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