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Old 09-07-2017, 12:27 PM   #1
iggyntangs
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Question Hypothetical Establishing US Residency Question

My understanding from a particular company is that because it has operations in both US and Canada if I want to join the company as an employee I have to go through their Canadian payroll (and get paid Canadian $).

If I were to relocate to the US then I could join the US payroll and get paid USD.

I'm of course asking because getting paid in USD poses a significant financial advantage.

First of all I didn't know the above was true, I thought you could live in Canada and join the US payroll version of a company but I suppose not.

Question and not trying to cheat any system, asking from a legal perspective, is there any way to genuinely establish a residence in the US to get paid in USD satisfying those requirements while continuing to remain in Canada for living purposes? E.g. Renting out cheap property, setting up a bank etc.

From a work perspective I will have to go to the US quite a bit throughout the year (year-round) for work on a TN visa anyway as most of my work is performed there. But would love to spend my weekends in Canada in my hometown where I reside.

And I'm a Canadian citizen if that means anything.

Any help or advice would be greatly appreciated, thanks!

Last edited by iggyntangs; 09-07-2017 at 12:29 PM.
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Old 09-07-2017, 12:38 PM   #2
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Originally Posted by iggyntangs View Post
My understanding from a particular company is that because it has operations in both US and Canada if I want to join the company as an employee I have to go through their Canadian payroll (and get paid Canadian $).

If I were to relocate to the US then I could join the US payroll and get paid USD.

I'm of course asking because getting paid in USD poses a significant financial advantage.

First of all I didn't know the above was true, I thought you could live in Canada and join the US payroll version of a company but I suppose not.

Question and not trying to cheat any system, asking from a legal perspective, is there any way to genuinely establish a residence in the US to get paid in USD satisfying those requirements while continuing to remain in Canada for living purposes? E.g. Renting out cheap property, setting up a bank etc.

From a work perspective I will have to go to the US quite a bit throughout the year (year-round) for work on a TN visa anyway as most of my work is performed there. But would love to spend my weekends in Canada in my hometown where I reside.

And I'm a Canadian citizen if that means anything.

Any help or advice would be greatly appreciated, thanks!
you say you're not trying to cheat any system, but you're asking for advice on how to legally cheat the system?
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Old 09-07-2017, 12:45 PM   #3
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You probably want to talk to an accountant that specializes in cross-border work. You can live in the US under a TN visa of course which would make the most sense logistically as far as what you're proposing-- this doesn't preclude having a residence in Canada as the TN visa is not intended to be an immigration visa. You will get taxed in both countries though with credits for taxes paid across the border (most likely-- again, talk to a professional).
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Old 09-07-2017, 12:51 PM   #4
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you say you're not trying to cheat any system, but you're asking for advice on how to legally cheat the system?
Well I think that's a bit unfair, I am asking if there are scenarios where I could do something legally. I'm not sure that should be characterized as cheating the system, which would infer illegal.

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You probably want to talk to an accountant that specializes in cross-border work. You can live in the US under a TN visa of course which would make the most sense logistically as far as what you're proposing-- this doesn't preclude having a residence in Canada as the TN visa is not intended to be an immigration visa. You will get taxed in both countries though with credits for taxes paid across the border (most likely-- again, talk to a professional).
Thanks, but I'm not really looking for 'taxing' advice per se. I know I'm going to need a TN visa period, living in Canada or US.

I'm just trying to see, if there a way I can be enrolled to their US payroll (getting paid USD), but physically residing in Canada...legally?
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Old 09-07-2017, 01:12 PM   #5
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Originally Posted by iggyntangs View Post
Well I think that's a bit unfair, I am asking if there are scenarios where I could do something legally. I'm not sure that should be characterized as cheating the system, which would infer illegal.



Thanks, but I'm not really looking for 'taxing' advice per se. I know I'm going to need a TN visa period, living in Canada or US.

I'm just trying to see, if there a way I can be enrolled to their US payroll (getting paid USD), but physically residing in Canada...legally?
I'm going to go out on a limb and say no.

It's not like you would be the first person to think this would be the way to go?

Edit: Even if you could get paid in USD for working in the states, the benefit of that would be negated from the tax you would have to pay as a legal resident in Canada since you would likely have to pay tax in both countries.

Last edited by Hockeyguy15; 09-07-2017 at 01:14 PM.
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Old 09-07-2017, 01:20 PM   #6
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You can't really be a resident of two countries at once. In order to establish US residency, you generally need to cut ties with Canada and spend at least 183 days of the year in the US. If you spend at least half the year in Canada, it's not going to work even if you do have a residence and bank account in the US. You'll still be deemed to be a Canadian resident.

If you are going to spend 183+ days in the US then it's possible to become a US resident, but that generally involves cutting most of your ties with Canada. If you still plan on owning a house in Canada and returning every week, then it's possible that you'll still be considered a resident of Canada even if you spend less than half the year here. And if you do manage to cut ties, it's worth noting what that means. You'd have no health coverage (i.e. you'd need private health insurance every time you returned to Canada) and you have to pay a so-called "departure tax" where you have a deemed disposition of all of your assets. Any capital gains that result from that deemed disposition must be paid even if the assets are not actually sold.
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Old 09-07-2017, 01:24 PM   #7
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This doesn't seem like a hypothetical question at all.
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Old 09-07-2017, 01:29 PM   #8
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Originally Posted by opendoor View Post
and you have to pay a so-called "departure tax" where you have a deemed disposition of all of your assets. Any capital gains that result from that deemed disposition must be paid even if the assets are not actually sold.
Can you explain that further? So if you sell your house you will have to pay a tax on that?
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Old 09-07-2017, 01:35 PM   #9
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Is it actually different being on the US payroll vs the Canadian payroll. Obviously a USD is worth more than a CAD, but are you sure they don't account for that?

If you can make 82k US instead of 100k CAD you aren't better off...
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Old 09-07-2017, 01:38 PM   #10
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Can you explain that further? So if you sell your house you will have to pay a tax on that?
No, primary residences aren't subject to capital gains. But for things that are, you have to pay tax on any capital gains that have occurred before you're allowed to establish residency somewhere else. Essentially the government wants to be able to tax the gains that occurred while you were a Canadian resident.

Just a simple example, if you own $100K in stocks that you originally paid $50K for, you have a capital gain of $50K. Normally you don't pay tax on that gain until you actually sell them, but if you're emigrating from Canada you have to pay the tax even if you hold on to the assets. With highly liquid assets it's not as big of a deal, as you could simply sell a portion to come up with money for the tax bill. But if it's something harder to move, or something you can't really sell a portion of (like an investment property or a business) then you need to come up with the money from somewhere else.
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Old 09-07-2017, 01:42 PM   #11
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So do you expect your company to pay you the same but in USD and you think that will put you ahead? Like you make $75K CAD right now and you want them to pay you $75K USD?

I work for an American company and I know the guys who work in the equivalent position in Houston make less than me when converted to USD.
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Old 09-07-2017, 02:29 PM   #12
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Quote:
Originally Posted by iggyntangs View Post
Well I think that's a bit unfair, I am asking if there are scenarios where I could do something legally. I'm not sure that should be characterized as cheating the system, which would infer illegal.



Thanks, but I'm not really looking for 'taxing' advice per se. I know I'm going to need a TN visa period, living in Canada or US.

I'm just trying to see, if there a way I can be enrolled to their US payroll (getting paid USD), but physically residing in Canada...legally?
Based on what you asked, this is pretty much exclusively a tax issue. If your question is "can I reside in Canada for tax purposes, but just get paid in USD?" then then the answer is very likely no.
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Old 09-07-2017, 02:34 PM   #13
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Originally Posted by opendoor View Post
No, primary residences aren't subject to capital gains. But for things that are, you have to pay tax on any capital gains that have occurred before you're allowed to establish residency somewhere else. Essentially the government wants to be able to tax the gains that occurred while you were a Canadian resident.

Just a simple example, if you own $100K in stocks that you originally paid $50K for, you have a capital gain of $50K. Normally you don't pay tax on that gain until you actually sell them, but if you're emigrating from Canada you have to pay the tax even if you hold on to the assets. With highly liquid assets it's not as big of a deal, as you could simply sell a portion to come up with money for the tax bill. But if it's something harder to move, or something you can't really sell a portion of (like an investment property or a business) then you need to come up with the money from somewhere else.

OK...that's more of what I thought. I married a girl that's from South Carolina so I'm starting the process to move done there. I have an appointment next month with my accountant to go over some of the pros and cons of how I handle my investments.
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Old 09-07-2017, 02:38 PM   #14
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OK...that's more of what I thought. I married a girl that's from South Carolina so I'm starting the process to move done there. I have an appointment next month with my accountant to go over some of the pros and cons of how I handle my investments.
I'm pretty sure you will have capital gains on your property here. Canada doesn't care where the primary residence is, but you can only have one. If your new primary residence is in the US you may have to pay gains on your property here.
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Old 09-07-2017, 02:44 PM   #15
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This doesn't seem like a hypothetical question at all.


It's a hypothetical hypothetical question.
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Old 09-07-2017, 03:11 PM   #16
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We recently relocated to USA on visas.
Through this experience it was clear the largest economic gains came in cutting all ties (economically) with Canada... but there's plenty of tax experts here who can and already have told you that.
I would see no reason why a company would put you on their US payroll unless relocation was required, as was the case in our circumstances.

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Old 09-07-2017, 03:27 PM   #17
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Default Hypothetical Establishing US Residency Question

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Originally Posted by kunkstyle View Post
This doesn't seem like a hypothetical question at all.


Duplicate post

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Old 09-07-2017, 04:02 PM   #18
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I'm pretty sure you will have capital gains on your property here. Canada doesn't care where the primary residence is, but you can only have one. If your new primary residence is in the US you may have to pay gains on your property here.
This is my understanding of the above:
If you keep a home in Canada (that was your primary residence and therefore not subject to capital gain) revenue Canada will assign a value on the property at the time of leaving, and you will be subject to the capital gain from that point on. This will begin the first day you leave Canada 'permanently' on your visa.
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Old 09-07-2017, 04:06 PM   #19
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Let's put it this way. Due to their compensation structure I could get paid 125K Canadian vs. 125K USD.

I assume I'd be paying the higher of two taxes either way, which would be Canada.

I'm really just wondering is there a way for me to be a part of their US payroll vs. Canadian payroll since it's financially lucrative to be so.

They aren't against it other than saying they can't see a way for it to happen unless I'm physically living in the US. I have no interest in relocating to the US, so I was wondering if there's a way outside that.

Appreciate people's insight on this thus far.
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Old 09-07-2017, 04:09 PM   #20
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nvm
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