If @ali21471 has a green card, they are considered a permanent resident of the US, and are subject to ALL US tax laws, regardless of where in the world they happen to live or perform work.
If you are a U.S. citizen or green card holder living in Canada, you still have to file a Form 1040 and report your worldwide income be- cause of the “saving clause” in Article XXIX(2), which allows the United States to tax its citizens and residents as if the treaty had not entered into effect. There are limited exceptions to the saving clause, which means certain types of in- come may be exempt from tax in the United States. Exceptions to the saving clause can be found in Article XXIX, paragraph 3.
https://www.irs.gov/pub/irs-pdf/p597.pdf
That means they file a full form 1040 tax return to report and pay tax on all their world-wide income , and in this case, a California non-resident return to report and pay tax on their income from California sources, including clients. (They would also file a resident state tax return if they maintain and permanent residence or "domicile" in another US state, even if they didn't live in the US all year.). They can claim a foreign tax credit on their federal tax return if Canada taxes them on the same income, but there is nothing similar that would avert or reduce the California tax on California-sourced income.
I was a bit confused because the question "What if I live in Canada" would have a someone different answer depending on whether the taxpayer was a US resident/citizen or not.
