My_question_is: Applicable to both US and Canada
Subject: New Job in the US
Expert: taxman at centa.com
Date: Monday October 23, 2006
Time: 01:43 PM -0400
QUESTION:
Hello the experts! I think I finally find a place that could answer my
questions. I'm a Canadian citizen working in the GTA area right now. I'm
planning to take a job in the US. This job will pay me 110K (90K USD base +
20K USD bonus). The job is located in Massachusetts, but the head office of
the company is at Austin, TX, and the payroll dept is located in the Austin
headquarter. I will start with 3-6 months training in Massachusetts
facility, but I will likely live in Nashua, New Hampshire since the facility
is located near MA/NH border. Here are my questions to you.
1. Do I need to file both US and Canada Income Tax Return?
2. Do I need to file MA, NH or TX state tax?
3. I do not want to lose my Canada tax status (meaning I still want to
contribute to my RRSP, CPP if possible). What should be my best practice
regarding income tax return?
4. Should I become a "resident" of any US states?
Thank you so much for answering my questions. Have a good day!
Best,
--------------------------------------
david ingram replies:
When you leave Canada, you will have to report the day you leave to Canada
on the top of your T1. In addition, you have to investigate whether you are
need to file forms T11612, T1243 and T1244.
1. Once in the USA, under article IV of the tax treaty, you will only be
taxable in the US on your US income unless you maintain a residence and
family in Canada.
2. There is no Texas return. From your description, you will have to file a
federal 1040 and a MA Form 1 NR-PY. New Hampshire does not have a return
for wages. If YOU HAVE INTEREST AND DIVIDENDS coming in, you will have to
file a DP-10 form.
3. If you are a non-resident of Canada taking on a new job in the US, you
will pay into the US Social Security program and NOT pay CPP. If you had
been transferred from a Canadian Branch to a US Branch for less than 5
years, there is a provision to allow you to pay CPP instead but if it is a
new job, the provision does not apply. Unless you are returning to Canada on
a regular basis as a resident and are keeping a home and likely a spouse in
that home, you will not be a resident of Canada and should NOT buy an RRSP.
4. If you are living in NH, you are likely a resident of New Hampshire.
If you keep a home in New Brunswick and commute to work in MA and stay in NH
Monday to Thursday nights, you may not be a resident of New Hampshire but
that would not be a cool way to live in my opinion having made the drive
from New Brunswick to MA a couple of times.
--------------------------------
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