Cross border Tax
US-Canadian Cross-Border Tax
Are you an American or Canadian crossing the border to live, work, and or invest? Let us plan for you.
Whether you are living, working, or investing on either side of the border, we can help you better understand your tax obligations and devise a plan that works for you.
Our Service
If you are an American moving to Canada or if you are a Canadian moving to the United States, it’s important to plan ahead so that you can minimize taxes. Our cross-border tax services is catered towards both individuals and corporations. We develop specific tax planning that minimizes your overall tax obligations through eliminating double taxation while ensuring full compliance with the IRS and CRA. For corporations that are looking to move and conduct business across the border, we can devise a cross-border corporate structure that will reduce overall tax liability.
Key Elements of our Cross-Border Tax Services
- Smart tax planning to avoid double taxation in Canada and the United States
- Full compliance with IRS and CRA filing requirements
- Advice on how to minimize Canadian and American personal and corporate income taxes
- Development of a cross-border corporate structure to avoid a high tax bill
Client Testimonial:
I had a great experience with Madan Chartered Accountant Firm. I required a US Tax number their knowledge was invaluable to me. I received my tax number in short order at a very reasonable cost. Thank you Brandon for all of your help - Leslie Whitton, President of D-Fence Products Inc.
Related Videos
I work in the US and Canada as well. On my 1099 slip it shows the income taxes, social security and the medicare taxes paid.
What amount should I report on the T1 return to claim foreign tax credit?
Hi Enrico,
Hi, you should report all the income taxes, social security and the medicare taxes paid as shown on the 1099 slip. Please be sure to convert the amounts in CDN using the average conversion rate for that year.
Thank you.
Hi, I have an US LLP which owns an LLC which further owns a rental real estate. The value of the real estate is more than $100,000. Should I report this on the T1135 form?
Hi Maurice,
If the cost of the shares of the LLP is less than $100,000, you wouldn’t have to file the T1135 form.
If I move to the USA and become a non resident in Canada. Will I be able to vote and apply for benefits such as CCTB and GST Credit.
Hi Martin,
The citizenship status wont be affected with your non residency for tax purposes. You would still be able to vote however, the benefits payments such as the CCTB and GST credits wont be available to you as you for them you have to be a resident of Canada.
Hi
What would be my tax implications if I earn USD$ 90000/ year for a company based in New York but I work from home here in Ontario. If the company deducts US taxes will I receive a credit when I file my taxes and what amounts will I be liable for if the company does not deduct any US taxes.
Thanking you for your help.
Hi Maddy,
If you receive a W2 and are an employee of an American company, you will have to report and pay tax on your US earnings in both the US and Canada.
You will have to file a 1040 NR (US return) and a Canadian Tax Return (T1). To avoid double taxation, you will receive a foreign tax credit on your Canadian tax return for American taxes paid.
However, if you operate as a self employed person from Canada, then you do not have to file a US return. You still have to file a Canadian tax return and pay Canadian income taxes on your US self employment income.
Thanks,
Hello Allan,
I recently went to Florida for my sister’s birthday and we went to the casino. I ended up getting a fair
amount of winnings. Are there any implications when I come back home to Ontario? IS there anything I
need to know before coming home?
Thanks,
Gerri
Hi,
If I have a S corporation in the U.S with me owning 33% of it, then how do my taxes get filed?
Thanx
Hi Moe,
If you are a Canadian resident, then you will be double taxed. You will first pay US personal taxes on your share of the S-corporation’s taxable profit. You will then pay Canadian personal taxes on any distributions (i.e. dividends) paid to you by the S-corporation.
The CRA does not recognize S-corporation’s as flow-through entities, but instead classifies them as foreign corporations. You will not receive a foreign tax credit on your Canadian tax return for the American taxes paid.
I want to invest in the US in Real Estate (flipping house or buy/renovate & sell) in Atlanta. I am Canadian citizen. What kind of company should I set up (LLC/Corporate/ LP)? I just want to minimize taxes when transferring the money to Canada
Hi Anil,
Create a LP in Atlanta and have the LP purchase the properties. This will allow you to avoid double tax and limit your liability.
Hello Madan & team,
I was working in the US until Jan 2018, and was a green card holder. Left Canada several years ago and did not have income in Canada. Everything was fine until this week.
I took a job with the Federal Govt.and moved to Canada this week. I plan to stay on the US side to visit family and also maintain residency requirements for the family. I get paid in Canada, but found s place to live in the US side and will commute. Can be Managed as I will be alone in Canada. Rest of the family is still in USA.
For 2018 USA tax, I intend to file MFJ, declare the US income from my spouse and my Canadian income.
For 2018 Canada tax, I plan to file my income alone, as the family is not claiming anything from Canada.
Also, since we (family in US, and me commuting from US side in to Canada) technically don’t live in Canada, I suppose we will not get health coverage for any of us from Canada. Also, GST credits cannot be claimed. Any complication you see here, pls advise so we can correct and comply. Thanks!
Hi BVP, your understanding is correct. You will have to file a non-resident return with the CRA and pay Canadian income taxes on your Canadian income. To avoid double taxation, you can claim a foreign tax credit on your US return for the American taxes paid.
Hi there,
When I left Canada and moved to US (to take up jobs) in 2016, I filled NR73 and stated in there to CRA that I have house, credit cards, accounts in RBC and TD Bank, driver’s license, health cards, TFSA, RRSP for me and my spouse in Canada. However, I was still termed as deemed non-resident in Canada, which was surprising. Do you agree with that assessment or should I write back to CRA regarding residency status? I file income tax return for the rental income (Part 13 return, have NRK account, request NR6 performa). For 2016, I filed my income tax return for part of year (3 months) when I was in Canada and then for the remainder of year as a resident alien in US (since I met the substantial presence test, more than 183 days). While filing my US income tax return, do I need to declare my TFSA accounts (they have non-redeemable GICs) in Canadian bank? If so, how?
Thank you
Hi Saurabh, pursuant to the Canada-US tax treaty, you are a resident of the country where your permanent home is located. As I understand, you have a rental property in Canada, and not a home in Canada where you can live. That is likely the reason the CRA said that you became a non-resident of Canada after you moved to the US.
You have to file forms 3520 and 3520A with the IRS in respect of your Canadian TFSA.
Hi Alen
I am a canadian citizen who maintain residential ties in Canada ( my wife lives in Canada) but I live and work in US. I am a resident of US for tax purposes … Am I considered deemed non resident now in Canada?
Hi Goli, according to the Canada-US Tax Treaty, you are a resident of the country where your permanent home is located. A permanent home can either be rented or owned. However, if you have a permanent home in both countries, then you are a resident of the country where your personal and economic ties are strongest.
I do not have enough information about you and your ties to help you make a determination on your residence status. However, you could be considered as a Canadian tax resident because you have a home in Canada and your wife lives in Canada. In other words, you are in the US only for work, while you maintain ties to Canada.
Hello Allan,
I’ve been watching your videos and reading your articles and you are very informative. Thank you!
I live in Toronto, and willing to open an online store. I will most probably get sales from the US. Do I need a cross border bank account? Will my taxes be cross border?
Thanks.
Hi Maria,
Your Canadian company will not be liable for US profits tax, unless it has a fixed place of business in the US. If you plan on collecting US dollars from customers, then your company should open up a US dollar business account with a Canadian bank.
1. As a US citizen, living in Canada and a CA Resident, should I avoid interest bearing savings (i.e TFSA) and checking accounts?
2. Recently married, should we file joint or separate? Wife (CA citizen) and myself (US citizen and CA resident). Should we hold joint checking or saving account?
Hi Mike,
Thank you for your questions. Avoid opening up a TFSA because TFSA’s are treated as non-resident trusts for US tax purposes. As a result, income earned in a TFSA is taxable in the US. In addition, TFSAs result in additional tax compliance for US citizens; specifically, forms 3520 / 3520A have to be filed for a TFSA owned by a US citizen.
Canadian checking and savings accounts are okay for you to hold. Have your spouse keep her accounts separate from yours, so that they do not need to be reported to the IRS on the US FBAR.
If you file jointly with your spouse, you will receive a higher standard deduction and you will benefit from tax rates applicable for joint-filers, which are better than those for separate filers. However, if your spouse is a high income earner, you may be pushed into a higher tax bracket, making you worse-off. To determine whether MFJ or MFS is better, prepare you returns under both methods to determine which one results in overall lower taxes.
I worked in the US on W-2 for less than 183 days. I had at-source deduction of taxes for Federal, State and SS & Medicare.
I suppose I need to file 1040NR but do I have to file
-Form 8833 as well to indicate the US-Canada treaty to avoid double taxation and where can I find the tax treaty number for that and Form 8840 for closer connections?
Hi Bhupinder,
Complete form 1040-NR (non-resident alien tax return) and form 8840 (closer connections to Canada). Form 8833 is not required if you are completing form 8840.
I am a Canadian citizen in the US on an F-1 student visa. I left Canada and have minimal ties (driver’s license, bank account with <$500). I want to change my last tax return as I did not tick the box saying I left Canada during the tax year. What documents do I need to mail with my T-1 adjustment form? And is this change of return sufficient or must I file NR 73?
Hi Mel,
You will have to file form NR73 with the CRA since you have already filed your return without ticking the box for emigrating from Canada in the year. You cannot amend your return without filing form NR73 first.
Hello, my husband and I who are Canadians, are going to invest in some real estate and some funds within the USA, and we are hoping to find a cross border accountant who can help us minimize our taxation by setting up the correct structure in the US. Is this something your company can help us out with? Could we have a phone call and discuss?
Hi Wendy,
Sure, I would be pleased to speak with you. To book an appointment with me, please contact my assistant Sade: sade@madanca.com
I am a dual citizen residing in the United States but want to return home to Ontario- I have American property to sell and I want to buy a home in southern Ontario- I have An IRA and am eligible for social security- I need tax advice to ensure I do the move correctly
Hi Brook,
I would be pleased to provide you with the tax advice you require. The fee for a 30-minute consultation is $110 + tax. To book an appointment with me, please send an email to amadan@madanca.com
My wife got a Postdoctoral position in France for 2 years and we are Permanent resident of Canada. I(spouse) will be going back and forth while the children will be with her. I learnt France will tax her income already. Will she need to pay as a factual resident tax in Canada as well?
Hi Kola,
If she moves to France with her children, and (a) she does not maintain a home in Canada, and (b) you, her husband, are not residing in Canada, then she will be treated as a non-resident of Canada for tax purposes. This means that her French income will not be taxable in Canada.
Hi, I moved to Canada in November 2018 for a full-time job for a Canadian subsidiary of a US company. This year I will move to the US to work from the HQ in the US. I have the option of moving between June and September of 2020. I do not own real estate anywhere and I would be moving with my spouse. Given the 183 day residency rule, is it better to move before or after July 1st to minimize my tax burden to the US and Canada? Thank you.
Hi Polly,
The 183-day rule applies to non-residents of Canada who are visiting Canada. Furthermore, the 183-day rule is trumped by the tax treaty between Canada and the US. According to the tax treaty, you are a resident of the country where your permanent home is located. A permanent home can either be rented or owned.
It appears that you are a part-year resident of Canada pursuant to the Canada-US tax treaty for the 2020 year because your permanent home is located in Canada, where you live with your spouse (since November 2018). Therefore, whether you move to the US in June or September, you will still be considered a tax resident in Canada for part of the year (up to the date of your relocation to the US).
I am a single Canadian citizen, no-dependents starting working in the US this summer on TN visa for 3 years. I own no property in Canada only bank accounts. What forms will I need to fill out during tax-time next spring? I presume I would become a non-resident of Canada for tax-purposes also since I would fulfill the significance presence test in the US.
Hi Joe,
Based on the information provided, you will become a non-resident of Canada when you move to the US. As such, you should file a departure return with the Canada Revenue Agency. In addition, for the first year, you should file a dual-status return with the IRS. Please let me know if you would like my assistance in preparing these returns.
I am a permanent resident of Canada working in the US on work visa. Due to COVID, I am currently working remotely from Canada. Is there a duration that I can work remotely without becoming a tax resident of Canada. I have a rental house in the US, family is with me . Do I or company needs to pay taxes to CRA
Hi Ashish,
Your US employer is required to comply with Canadian payroll regulations if you are working remotely in Canada. This means that your US employer must deduct Canadian payroll taxes from your paychecks and remit the deductions to the CRA. In addition, your US employer must issue a T4 Wage Slip for the days that you worked in Canada.
Second, you may be considered a factual resident of Canada if you are working and living in Canada as a permanent resident with your family. Practically, if you leave in a few months and move back to the US, you can argue that your stay in Canada was of a temporary nature due to Covid-19 and therefore you are a non-resident of Canada.
Hi, I am a resident of Canada and earn foreign income from Trinidad (tax treaty exist) the employer however does not withhold the taxes so I believe I may be considered self- employed. With that being said I am assuming all taxes will just be paid here in Canada? Are you required to earn this money in Canadian dollars, in a Canadian bank account? Seeing that I have been working under my name and this one company pays me do I need to register in Ontario as a sole proprietorship for tax purposes?
If you work for a single company and are paid a salary, you are an employee, even if the employer does not deduct payroll tax. Report your foreign employment income on line 104 of your T1 Canadian personal tax return and pay Canadian (Federal + Provincial) income tax. Do not register as a sole proprietor. Convert the Trinidad dollars into Canadian dollars using the average exchange rate for the year.
Hi. We are relocating to France for 12 months, I will be returning to Canada to work every third month as a dentist. My wife will be working remotely while away as a canadian lawyer. Would we have french tax obligations? Keep our primary house but rented it out while we’re away.
Since your relocation to France is of a temporary nature, you and your wife will continue to be tax residents of Canada. Tax residents of Canada are taxable on their global income. Consider filing a subsection 45(2) election to keep the principal residence exemption while you are away in France. I suspect that you will pay tax to France on income earned in France, but please check with a local French accountant.
Hi,
I would like to obtain a quote for filing US Federal and State income taxes for a C corporation that are overdue.
The business is registered in Delaware but it did not have any revenue yet.
Do you provide services for US based Corporations?
Thank you,
Daiane
We do file US corporate tax returns. Our fee to prepare a US corporate tax return (1120) starts from $1,500 CAD + disbursements and taxes.
Hi. I work as a professor at a Canadian university and expected to receive my US green card through my mother (who is American). I intend to continue to work in Canada 3 days of the week and in the US 4 days. Should I pay my Canadian income to US or Canada? Also, is there a risk of loosing the green card if I declare non-resident alien on my US tax returns?
If you maintain a home in Canada and your personal and economic ties are stronger to Canada than the US, then you are a deemed resident of Canada pursuant to the Canada-US tax treaty. This means that you must pay tax to the Government of Canada on your global income. As a green card holder, you cannot file a non-resident tax return with the IRS. You must file a 1040 resident return. To avoid double taxation, claim foreign tax credits.
US/CAN dual citizen working remotely for Toronto company. I want to move back to USA but keep my Canadian remote job until I find a USA one. What should I know for taxes and is there anything my employer must do differently?
Also what about the other way around? What would be the implications to be a W2 employee using a us address but living In Canada? Could I be a employee and just be responsible to pay taxes?Thank you.
Hi Ricardo,
Pursuant to the Canada-US tax treaty, employment income is taxable in the country where the employment services are performed. As such, if you are working in the US for a Canadian employer, then your Canadian employer must remit US payroll taxes and issue a W2 slip to you.
On the flip side, if you are working in Canada for a US employer, then your US employer must remit Canadian payroll taxes and issue a T4 slip to you.
To Whom It May Concern: I am a professor at a Canadian University and I am trying to move the US while keeping my job and continuing to teach online. Would I be able to do this without becoming an independent contractor? I would be living in the US but coming to Canada for a 13 week stint each year to teach some courses in person. If it’s relevant, I’m also a dual citizen (US/Canadian).
Thank you!
Hi Peter,
Yes, you can do this without becoming an independent contractor. File a T1 non-resident return each year with the CRA and pay Canadian income tax on your teaching income.
Hello,
I’m working in US and I have my PR of Canada. Do I have to pay tax for my US income while filing tax for Canada?
Thanks!
If you are a factual resident of Canada or a deemed resident of Canada pursuant to the Canada-US tax treaty, then you must pay tax to the Government of Canada on your global income.
Hi,
My name is Akash. I moved to Vancouver, BC on September 22nd, 2022 from Seattle, WA. I work at the same company in Vancouver as I was working for in the U.S. I have a W2 and a T-4, and need to file both U.S and Canada taxes. I had a stock grant from my company which was awarded in the U.S but vested in Canada, due to which I was doubly taxed. Are you able to help me with filing my U.S and Canada taxes. Thank you.
I’m very sorry for the late reply and I hope that you were able to file your returns. We do prepare both US and Canadian tax returns. The starting price for a Canadian tax return is $260 CAD, and the starting price for a US tax return is $450 CAD. Disbursements are extra.
The Canadian government withdraws more taxes from our Canadian retirement income than we can use as a foreign tax credit on our US tax payment.
We are citizens of the US and now permanent residents. How do we get the almost 20k Canadian being withheld in Canada?
Consider filing a Section 217 Return with the CRA to recover all or a portion of the withholding tax deducted.
We are thinking about retiring back to Canada and had some tax questions.
Please send an email to me with your questions: amadan@madanca.com Note that the fee for a 30 minute session with me for tax advice is $130 + tax. To book an appointment, please go here: https://madanca.com/contact-us/
I invest in start-ups though syndication (SPVs) via US LLC with less than 5% ownership. Due to the nature of start-ups investing, a distribution will only be realized if there is a liquidation event for the start ups (i.e. IPO or M&A), which might take a decade if it happens. Do I have any US and/or Canadian tax filing obligations in the mean time?
If a liquidation event does occur, what will my tax filing obligations and liabilities be in US and Canada?
In my research it appears that since Canada deems US LLCs as corporations, there may be some double taxation risk. Is there a way to plan to avoid double taxation.
Hi Sam,
Canada deems LLCs as foreign corporations. There is the possibility of double taxation during the period of ownership. If the cost amount of the units, including the cost of any other foreign property that you own, is more than CAD 100,000 at any time in the year, then complete form T1135, foreign income verification statement and file it with the CRA.
Note that distributions made by the LLC to you should be recorded as foreign dividends on your Canadian personal tax return. In addition to this, you should file a 1040-NR tax return with the IRS to report the income/loss attributed to you from the LLC in the year. Lastly, a foreign tax credit can be claimed on your Canadian tax return; the FTC is limited to the lesser of 15% of the gross distribution received and the US income taxes paid.