US citizen in the US working remotely for Canadian company

Forum|Forum|6 years ago
August 7, 2019
3 replies
4 views

Hello, I'm considering working for a Canadian company while being a US citizen and working remotely in the US.

What would deductions, taxes, and paycheck look like in this scenario? I don't want to be considered self employed. What about social security, medical and other deductions you would usually see on paychecks?

Thanks!

rjs

Level 15

@rememberstarfox wrote:
What would deductions, taxes, and paycheck look like in this scenario?

It should look exactly the same as if you were working for a U.S. employer, because you are working in the U.S., not in Canada. It doesn't make any difference that the company is located in Canada, if you are working in the U.S.

@rememberstarfox wrote:
I don't want to be considered self employed.

You have to discuss that with the employer and make sure you have a clear understanding, before you start the job, that they will treat you as a U.S. employee and give you a U.S. Form W-2.

pk_

Level 15

@rememberstarfox , for a foreign entity with no US presence , there may be no EIN and therefore they will have a difficulty withholding and transmitting your federal , State and FICA taxes. Generally such foreign entities, when employing an US person remotely, tend to pay directly and issue an income statement. Such case is equivalent to Self -employment in that the "employee" is responsible for making estimated payments for federal, State and FICA ---- all you have o do is make sure that the "employer " pays you his share of the FICA tax ( 15.3 % shared equally between employee and employer in case of W-2 employees). I suspect similar arrangement also makes the foreign entity's local tax reporting easier. That is my take on this

I agree with @rjs , that you need to clarify this situation with the Canadian entity.

Pongko

Level 2

Hi @pk12_2, my wife is in the similar situation. She’s working full time for a foreign company, getting paid and paying tax in her country. Her company doesn’t have any business in the US. She work remotely in the US because we are married and she is a legally US resident now. Her company doesn’t want to file or deal with the US gov period. How can we file and how can we be responsible for the social security and medical tax? Just file as a self-employ and calculated the social security tax with the 8919 form at the end of the year? Thank you very much!

Anonymous

I am researching this similar situation, but in reverse for eventually moving to the UK. I would not be moving to the UK on a work visa, but a settlement one since my spouse is a UK citizen. However, I'd like to keep working for my US company on a trial basis for 6 to 12 months after arriving in the UK and getting settled, longer term if possible.

I am a US Citizen, would be working for a US-based company (which has overseas presence in India, but not the UK), and would eventually have UK residence. I assume none of my benefits would transfer (life, health, other health/vision/dental coverages/perks), and that I would have to pay 'self employed' taxes on the UK side. I would likely qualify for the Foreign Earned Income Tax credit, since I would be 100% based out of the UK at that point (no more permanent address in the US except for some mail to my parent's house or something.)

Bottom line I know I have to talk to my current company's HR team first, and see if it's possible at all - but I am having difficulty finding information for people in this arrangement. The taxes and benefits is probably the primary concern for me (and I assume my company... wouldn't I be a less expensive employee if they didn't have to cover me for health/life/vision/dental since I could technically get some of it from the UK NHS?)

@pk12_2 @rjs

Marsillius

Level 2

Hi. I was curious how it worked out for you to work remotely in the US for a Canadian company as a US citizen. Did your employer end up considering you self-employed? Did they stop withholding Canadian taxes and start withholding US taxes? Or something else? I'm considering a similar situation myself.

Thanks

rememberstarfoxAuthor

Level 2

So here's what I ended up doing:

Form an LLC
Have the Canadian company pay the LLC as a direct funds transfer
LLC pays me (you can use a payroll company if you have multiple people or pay yourself)
Canadian company can concern themselves with their taxes
I concern myself with LLC taxes

Hope that helps 🙂