I am a Canadian PR and would like to work for a US company. how will that work? How can they pay me as I will be working from Canada (Remotely)? How does the taxes work?

[ashish-ruhani]

I am a canadian resident and I got the offer from a US company to work for them remotely from Canada. I need to know how would this arrangement work? What kind of setup will be needed? Independent Contractor or Sole Business owner or something else? How will my taxes work in Canada? What kind of documents I will need from the US Company? Does the US company need to provide me 1099 or they can use 1042 & 1042-S ? Please help me out here.

[Mohammed-TurboTax · Accepted solution]

Congratulations on your new job.

Re: taxes: you need to file Canadian income tax and report your employment income as foreign income, like Delphision mentions. You can set yourself up as independent contractor, or sole proprietor, or solo incorporated business owner. Whichever is appropriate according to the job terms between you & your employer. Talk to their payroll/HR for more info. Whichever way you set up the contract, there will be paperwork submitted to you by your employer, for tax purposes. Generally distributed out on January/February 2017. You report them as foreign income in your Canadian tax return. You'll get all relevant tax credits (for tax paid in US, for example) as per Canada-US tax treaty.

Ask your employer if you need to file a US tax return as well. We can only provide answers related to Canadian return.

[Delphision]

As a permanent resident, and presumably, a US citizen, you will file taxes in both countries.  The US charges tax due to citizenship, whereas Canada charges tax based on residency.

The company can pay you as a contractor.  You will be reporting foreign income including the exchange.  You will also be able to report the tax retained by the US company as a deduction.

You will need a copy of whatever slip the company deems appropriate.  You will have to ask the company how they normally report this type of income.  To them, it is not foreign income, so it may be on a 1099 or any other appropriate form.  In Canada it is simply foreign income reported on your personal income tax.

[ashish-ruhani]

I am sorry as I was not clear but I am not a US Citizen. I believe this will change the way company will report me and what document they will send me.

[Delphision]

You will find some information here on how the US is likely to report.  You will still report foreign income in Canada, and income from anywhere else regardless of the slips involved.  You can also ask a question on the US forum at www.turbotax.com

https://find.irs.gov/search?utf8=%E2%9C%93&affiliate=irs&query=tax+slips+for+non-residents&commit=Se...