QUESTION: I am a US citizen working in Canada. My postition is responsible for Manufacturing in both Canada and the US. I moved to Canada mid 04, and had my pay changed to our Canadian office. Am I responsible for paying Canadian Gov Pention, Employment insurance, etc? I will be moving back to the US mid 05. Would I be better off being paid out of our US office, and have US taxes withheld, or do I need to continue to be paid out of our Canadian office? --- david ingram replies: Your employer can write to the Canada Pension board and ask to have you exempted from Canada Pension Plan contributions and keep your US Social Security up if your employment in Canada is expected to be for less than 5 years AND you were transferred to Canada as you seem to have been. If you had just taken a job in Canada, this option is not available. That means that your Canadian employer will still deduct Canadian Income Tax and Canadian Employment Insurance. It would be worse accounting if you were being paid out of the US office. The big question is: "Are you being guaranteed tax equalization for your one year transfer?" Most employees in your position would get tax equalization which means that the company would make up for any extra tax you had to pay to Canada. I would be happy to look after your US / State / Canada tax returns this year by fax, snail mail, email or courier. A typical fee would be in the $700 to $1,400 range with $1,000 Canadian more likely than $700. Your position is further complicated by the fact that you are still working in the USA as I read your email. That means that we need the number of days worked in both countries to pro-rate the income between the two countries. You will still pay tax to the US first for the days you worked in the US and then report it again in Canada and claim a foreign tax credit for the tax paid the US and any state you worked in. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth Management and I, David Ingram will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com <http://www.600am.com/> Local calls are taken at (604) 280-0600 and Long Distance calls are taken at 1( 866) 778-0600 I do not know how far the LD line reaches. ========================================= This from "ask an income tax and immigration expert" from www.centa.com <http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or www.featureweb.com <http://www.featureweb.com/> . 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