QUESTION: Hi David,
I have several questions for you... First, I am a Canadian
Citizen and owner of a small Canadian Company in Montreal,
Quebec. I have recently been offered a 6 to 10 months position in
Illinois on a Corp-to-Corp basis. With this said, here are my
questions...
1. Do I need a TN visa since I will be collecting my pay from a
Canadian company or do I still need to get one because the
services are being rendered in the US?
2. Who would need to supply me with the letter that I show to INS
to get the Visa? my company or the US company?
3. What forms do I need to fill out and what forms does my
company need to fill out??? The company in Illinois said that all
they needed was a W40. How do I go about getting that?
4. Would I still need to file taxes in the US since I am being
paid in dividends in Canada?
5. Does my company need to file for taxes in the US?
I would like to know how to make this happen. Any information you
can give me would be very helpful. I thank you in advance and
hope to hear from you.
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david ingram replies:
I have never heard of a W40. I expect that you mean a W4 which
is NOT a corp to corp document, it is a US employee deduction
form for the US which means that they would be paying you
directly for your services which, in my opinion, is the proper
way to deal with the situation. You can find the W-4 (analogous
to a Canadian TD-1) at:
http://www.irs.gov/pub/irs-pdf/fw4.pdf
==============
You mention being paid out as dividends., In My opinion, this is
the wrong way for ANY Canadian to set up their remuneration from
their own company. Paying dividends means that you do NOT get to
contribute to the Canada or (in your case) Quebec Pension Plan
which is a BIG mistake. I know dozens of people today living on
handouts because they did not pay into, did not believe, or just
plain objected to paying into the CPP. back in 1972 when was
worth millions and controlled some 700 offices in 30 states and
provinces, I was quoted in many magazines and newspapers with
figures showing how the CPP was silly and would never work. You
might want to pay yourself a combination of salary and dividends
but you should always pay yourself (and your spouse) enough that
you pay the maximum into CPP or QPP.
Today, at 63/64 I am looking forward to collecting CPP in a
couple of years after a $5,000,000 bankruptcy and worse divorce.
Don't worry, I am doing very well again but I know a dozen people
who used to keep their turboprops or jets at the south terminal
of the Vancouver Airport and have nothing left today. An RRSP can
be seized in most bankruptcies. The Canada and Quebec Pension
Plans can NOT be seized.
There - that is off my chest.
If you are working in the US and providing services on location
in the US, you need to file a US tax return and pay tax in the
US. If you are not working in Florida, Nevada, Washington, Texas,
Alaska, Tennessee or New Hampshire, you will have to file a State
tax return as well.
Because you are a resident of Canada, you will also have to
report the income to Canada again and calculate the Canadian and
Quebec income tax as well. However, you get credit on your
Federal (Sched 1 - line 431) and Quebec (Sched E line 409)returns
on (usually) a dollar for dollar basis. Note that the lines
given are just a hint about where to start, you need to fill out
the relevant schedules referred to at those lines.
If you are there working for your company (which is possible),
your company will need to file a US 1120F foreign corporation
return as well.
I am not sure what TN visa you will be obtaining. If you are
going down as a personnel person in the health field or as a
DHTML computer programmer, you will not qualify for a TN - If you
do not qualify under the definition below, you will need an H
visa which will likely take over a year to obtain at this point.
The following is from my 13 year old BORDER BOOK but there are no
changes that I know of.
========
On December 8, 1993, President Clinton signed the NAFTA
Agreement, which took effect on January 1, 1994 under
101(a)(15).
TD - Spouse or Child of NAFTA Professional under 214(e)(2) (TN
holder)
TN - NAFTA Professional - (North America Free Trade Agreement)
PROFESSIONAL BUSINESS PERSON
A professional is defined as a person with a minimum of a
bachelor's degree, who applies for a position, which requires a
degree as its minimum entry-level requirement unless otherwise
specified.
This is the one we heard about in the news. To meet this
classification which is unique to Canadians, you must have a bone
fide job offer and all licenses and degrees in place for your
profession.
CHECK LIST for the TN Visa
* An applicant for admission must establish Canadian
citizenship
* The applicant must be entering the United States to engage
in a profession or occupation at a professional level under NAFTA
* The applicant must be in possession of an offer or contract
of employment from a United States employer stating:
1) The professional activity to be engaged in
2) Purpose of entry
3) Remuneration
4) That the position is temporary in nature and will
not exceed one year (although it can be renewed)
* The applicant must provide documentation of his or her
educational degree or professional qualifications
* The applicant must meet all licensing requirements
* Employment need not be full-time
* Permanent residence abroad is not a prerequisite
* Maximum period of admission of a TN is one year
* TN dependants accompanying the principal TN will be admitted
under the "TD" classification for the same amount of time as the
principal
* A $56 U.S. fee is required ($85.00 for renewal by mail)
* TN applicants are not permitted to enter as a professional to
participate in any way to circumvent a strike
* SELF EMPLOYMENT IS NOT PERMISSIBLE
The following is a partial list of some who qualify under a TN
Visa. Please note that extensive experience can equal a degree in
many cases. All need a Bachelor or Baccalaureate degree unless
otherwise noted. In some cases, 3 or 4 years of practical work
in a discipline can count for one year of a University degree.
Therefore if the University BA requires 3 years, you need 9 or 12
years of work experience to qualify.
* Accountants - RIA or SIA or CPA or CGA or CMA or CA
** Actuaries (this is one of two classifications added since
1989)
* Agriculturalists
* Agronomists
* Animal Breeders
* Animal Scientists
* Apiculturist
* Architects - BA or state / provincial license
* Astronomers
* Biochemists
* Biologists
* Botanists
* Chemists
* Computer Systems Analyst - BA or Post-secondary Diploma or
Post-secondary certificate and three years of practical
experience. This does not get you to the USA, if your job is
programming a computer. An Analyst might spend a day a month
working on some modifications (in a testing mode for instance),
but they better not be thought of as a "programmer" within the
company.
**** Computer Software Engineer *** This is NOT here as an
approved occupation. However, Jackie Bednarz (US head of the
NAFTA Section 16 Working group in Washington stated specifically
that if a recognized University was to offer the degree, she
would consider computer software engineers under the ENGINEER
classification when a recognized University granted the degree.
My understanding is that SFU and McGill are now granting such
degrees and that the Professional Engineers of British Columbia
have recognized graduates as members of their professional
society. Note that TC and TN's were being granted for this
category on a sporadic basis until the INS realized that no such
"official" degree existed.
Jackie Bednarz also pointed out (She was part of the original
negotiating team when the original FTA (Free Trade Agreement) was
being negotiated in 1985, 86, 87 and 88, there was no such thing
as the INTERNET, "web masters" and "web sites". When negotiating
the job titles, no thought was given to the computer revolution,
other than the computer system analyst designation, which at the
time meant a main frame analyst for a $1,000,000 computer.
(Thanks to Stuart Lynne and Richard Pitt) (www.fireplug.net), the
CEN-TA Group was an official member of the internet as far back
as 1986 and thanks to Bill Gates himself (he told me to use
Microsoft Xenix as my operating system) and Radio Shack Model 16
computers, CEN-TA was using "email" between offices in Toronto,
Ottawa and Vancouver as early as 1983.
As another aside, Stuart Lynne and Richard Pitt went on to found
WIMSEY, the FIRST ISP in CANADA. Bill Gates became quite famous
as well.
* Dairy Scientists
* Dentists - DDS, DMD, or state / provincial license
* Dental Technicians
* Dietician
* Disaster Relief Insurance Claim Specialists - (claims adjuster
employed by an insurance company located in the territory of a
party or an independent claims adjuster) - BA and successful
completion of training in the appropriate areas of insurance
adjustment pertaining to disaster relief claims; or, three years
experience in claims adjustment and successful completion of
training in the appropriate areas of insurance adjustment
pertaining to disaster relief claims
* Doctors - (see physician further on)
* Economists
* Engineers - BA or state / provincial licensing
* Entomologists
* Epidemiologists
* Forester - BA or state / provincial licensing
* Geneticists
* Geochemist
* Geologist
* Geophysicists (including Oceanographer in the United States)
* Graphic Designer - BA or post-secondary diploma and three years
experience.
* Hotel Managers - BA in hotel / restaurant management; or,
post-secondary diploma or post-secondary certificate in hotel /
restaurant management and three years experience in hotel /
restaurant management
* Horticulturist
* Industrial Designer - BA or post-secondary diploma or
post-secondary certificate and three years experience
* Interior Designer - BA or post-secondary diploma or
post-secondary certificate and three years experience
* Journalist BA plus three years experience - (This category is
no longer valid and has been left in to explain the
circumstances. As I understand it, journalists in general took it
as an insult that they had to have a BA degree, because, "most,
if not all," of the best known journalists do not have a BA
degree.)
* Land Surveyor - BA or state / provincial licenses
* Landscape Architect
* Lawyer (including notary in the Province of Quebec) - LLB, JD,
LLL, BCL degree (five years); or membership in a state or
provincial bar
* Librarians - MLS or BLS (for which another BA was a
prerequisite)
* Management Consultants - BA; or equivalent professional
experience as established by statement or professional credential
attesting to five years experience as a management consultant, or
five years experience in a field of specialty relating to the
consulting agreement. I must make it clear here. A Management
Consultant is NOT a manager. The surest way to lose your
management consultant renewal is to show up at the border with a
business card with the title General Manager, Western Region, or
Human Resources Manager, or, or, or. A management consultant
could consult with the actual sales manager about sales
techniques or about selling into Canada. A management consultant
could be advising the actual human resources manager in hiring
techniques or even suggesting that one candidate is a better fit
than another one. A management consultant can do market
research, gather and assemble data and write a report to give to
the manager. This is likely the hardest TN visa to get but is
also a very important one when it comes to serving the needs of
the US company.
Note that the management consultant does NOT need a degree, just
five years experience. This is the perfect job description for
the person with 23 years of job experience who has never gone
through the formal process of getting a university degree in the
discipline.
* Mathematician (including statistician)
* Medical Laboratory Technologist (Canada) / Medical Technologist
(U.S.) - BA; or post-secondary diploma or post-secondary
certificate and three years experience
* Meteorologist
* Nutritionist
* Occupational Therapist - BA; or state / provincial license
* Organic Chemist
* Pharmacologist (Pharmacist) - BA; or state / provincial license
* Physician - (teaching or research only), MD or state
/provincial license. To work as MD, a doctor must pass his MLE
(medical licensing exam), which has three, parts written over a
year. After passing, he or she would enter the U.S. under an
H-1A.
* Physicist (including oceanographer in Canada)
* Physiotherapist/Physical Therapist - BA; or state
/provincial license
* Plant Breeder
** Plant Pathologists (This is one of two professions added since
1989)
* Poultry Scientist
* Professional (most recognized professions)
* Psychologists - state / provincial license
* Range Conservationist
* Recreational Therapist
* Registered Nurse - state / provincial license
* Research Assistant (working in post-secondary educational
institution)
- * Scientific Technician - Possession of: (a) theoretical
knowledge of any of the disciplines: agricultural sciences,
astronomy, biology, chemistry, engineering, forestry, geology,
geophysics, meteorology, or physics; and (b) the ability to solve
practical problems in any of those disciplines, or the ability to
apply principles of any of those disciplines to basic or applied
research.
* Social Worker
* Soil Scientist
* Sylviculturist
* Teacher (College, Seminary, or University) (Post Secondary
level only)
* Technical Publication Writer - BA, or post-secondary diploma or
post-secondary certificate, and three years experience
* Urban Planner (including geographer)
* Veterinarian
* Vocational Counsellor
* Zoologist
SUBJECT TO CHANGE
This list is subject to change at any time. When talking to
Dennis Olsen about updating the rules, I mentioned a nurse who
had found out that nurses could go south instantly in the late
1970's. She got a job offer from a Hawaii hospital, came back to
Vancouver, quit her job, sold her house, kicked out her husband,
gave away the dogs and showed up at the airport to move to
Hawaii, only to find out that they had closed the quota for
nurses.
And then, as I was writing this exact section of the book in
March, 1995, I received a call from a Doctor who had a job offer
from the U.S., sold his house and Canadian practice, only to be
told that he did not qualify when he showed up at the border
because although a practicing family physician in Canada and
fully qualified to go south with a Green Card (a resident alien
immigrant visa), he did not qualify as a TN (can only teach or do
research) and he did not qualify as an H-1B because he had not
written an MLE. This medical licensing exam is written in three
stages over a one year timetable. I guess he has to sue his
immigration attorney in Los Angeles. This attorney knew he did
not have his MLE, but charged him significant monies and told him
he could get in now!
Remember, NONE of the foregoing confers permanent status. For
permanent status, you must still stand in some sort of line.
However, it seems to be true that if you are in the U.S. as an H
or L-1 visa holder, your line moves much faster than if you start
from out of the country.
---------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
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time - (please do not fax or phone outside of those hours as
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email to taxman at centa.com
www.centa.com www.david-ingram.com
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