@carsonschafer , agreeing with the answers and comments ( including how to report your incomes ) from my colleague @rjs , I would just add:
1. For US tax purposes there is no recognition of dual citizenship ---- in your case and for US tax purposes, you are a US person and therefore taxed as such. Also note that ( even though it is not pertinent in this case ) while most countries' taxation is Residency based , US (and a few others ) taxation is Residency and citizenship based ( domestic based on Residency and abroad based on citizenship)
2. For US purposes, you cannot be an employee of a "non-existent" entity. What I mean by this is that to be an employee ( for tax purposes), you must be employed by an entity that is organized in the US under its laws or have a recognized branch office. Thus your relationship with the Canadian entity and only for US purposes is that of a Contractor/Contractee---- you are self-employed performing tasks for a foreign entity.
3. Based on the above , you file a schedule-C to show the income from this income stream. You are therefore also subject to SECA taxes ( 15.3% of most of net income ).
4. Note that if you so choose you can take advantage of totalization agreement and pay FICA/SECA only to one country.
5. The fact that the Canadian entity has withheld Canadian taxes comes into the picture ONLY as eligible for Foreign Tax Credit ( form 1116 with its limitations and based on US-Canada tax treaty ).
6. Generally, and because your Tax-home is US, it is best to complete the Canadian return so that the Foreign Tax amount is settled before completing the US return claiming FTC ( as otherwise you may have to file an amended return if the Foreign Tax amount changes from that withheld at source ).
7. I am assuming here that while you are a citizen of both countries, you are resident of US and have closer connection to US. Thus and per tax treaty you are not a resident of Canada for tax purposes. This generally leads to the conclusion ( and based only on what you have described and Canada's definition of a "resident" ) that the Canadian entity should not have treated you as an employee and/or issued a T-4.
MY conclusions are based on US-Canada Tax treaty and general definition of resident on CRA website plus Price-Waterhouse-Coopers Lybrand discussion document of Canadian taxation.
Is there more I can do for you ?
