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Hello,

Was hoping to get some advice for a situation here.

I am a US Citizen living in Canada with my wife, daughter, and my wife's family. I do not work, but found an opportunity to work remotely from a US company, in the transportation industry.

We are in the process of applying for PR status for myself, my wife is Canadian and my daughter was born in Canada as well.

I would be paid through direct deposit to a US account which I could then transfer to my wife's account.

I understand I would need to file in the states as a 1099, but what would happen on the Canadian side of things,

Thanks in advance,
 

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Because I am so cheerfully non-compliant on taxes (dual US-Canada living in Canada) I don't entirely trust my advice on tax matters. However, what I think would happen is that if you are living in Canada, you are tax resident in Canada. So as far as Canada is concerned, money you earn from your US-but-remote job is considered taxable income. You would need to file a Canadian tax return and pay tax as appropriate. In terms of US filing obligations, you would then offset taxes paid in Canada with either the FEIE (foreign earned income exclusion) or FTC (foreign tax credit) so that you are not taxed twice.

I'm not sure what 1099 means in this context, but if your US employer is taking deductions for taxes and social security stuff, you may have some paperwork on your hands claiming that back. It would probably be easier to set yourself up as self-employed in Canada and then bill your US employer as a consultant (not sure if you need to charge GST to an out-of-country client).

Being a citizen I know nothing about immigration status and work permits and all that in Canada. If you can work now, this is probably fine. If you can't work now, this may or may not be straightforward.

Probably the one thing you should not do is take the US job and pay the money into a US account without completely understanding the tax and immigration implications for Canadian residency. (Alternatively, just go for it, pay US taxes on the money and never tell Canada.)
 

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Working on a 1099 generally means that you're working as a "contractor" - i.e. the employer should not be withholding either US taxes or "payroll taxes" (US social security or other benefits like health care). That makes you responsible for your tax obligation to both the US and Canada.

As Nononymous says, you'll be considered "self-employed" - however Canada chooses to handle that. But the fact that you will be physically present in Canada while doing whatever means that you'll be considered to be working in Canada. The big plus is that you'll be eligible for the Foreign Earned Income Exclusion on your US taxes, which avoids any double taxation. It does complicate your US filings a bit, but nothing all that difficult to deal with.
Cheers,
Bev
 

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On your U.S. tax return, if you take only the Foreign Tax Credit, and if your daughter is a U.S. citizen under 18 (or 17 -- I can't remember), then it's likely you can collect $1000 in free money from the IRS via the Additional Child Tax Credit. It'll depend on how much income you receive, but do look into that option. Free money is good.
 
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