Tax guides
Owner pay and payroll under rules on both sides of the border and the Canada–US tax treaty.
Sole proprietors, partnerships and corporations: if your worker works in the US, get an IRS EIN and work-state accounts; if in Canada, get a CRA payroll account and, when Quebec payroll applies, Revenu Québec registration. The employer remits withholding, pays required employer contributions and files wage statements. Check workdays, treaty relief and social security coverage before the first paycheck.
Self-employed · Partnerships · Corporations
For US-only work, a Canadian corporation generally owes no Regulation 105 withholding or T4A-NR, but may owe Form 1099-NEC. Request a W-9; a missing taxpayer number can trigger US backup withholding. Canadian work requires Regulation 105 withholding unless CRA approves a waiver, and a T4A-NR even if withholding is waived.
Corporations
A Canadian resident can receive salary, dividends, a documented loan, or a payment through a Canadian company, but each has different tax and filing rules. Salary for work in Canada is employment income. A US corporation's dividend is foreign investment income. A single-member US LLC may be disregarded in the US yet treated as a corporation in Canada, so withdrawals need separate Canadian analysis.
Self-employed · Corporations
Canadian withholding starts on the first Canadian workday. CRA should receive RC473 at least 30 days ahead; approval covers treaty-exempt employees under 45 days of Canadian work per calendar year or 90 days in any 12-month period including payment. Otherwise, withhold unless CRA approves an employee waiver. Employers owe missed deductions. Quebec establishment rules, pensions and unemployment insurance are separate.
Corporations · Partnerships · Self-employed
Before the first US payday, the Canadian corporation should check Form 8233, state withholding and Canadian deductions. A Canadian treaty resident who is not a US citizen may avoid federal tax on US-work pay under the $10,000 or 183 days treaty test; a state can still tax it. Form 1120-F may be due before a permanent establishment makes attributable profit taxable.
Corporations
Canada does not tax employee stock options at grant. Options granted while the company was a Canadian-controlled private corporation are taxed when the shares are sold, even after a later round or flip. Other options, including a Delaware parent's, are taxed at exercise, with payroll withholding. Half the benefit is usually deductible.
Corporations · Individuals
A payer generally withholds 15% from gross fees paid to a US business for services physically performed in Canada, unless the CRA authorizes a waiver or reduction before payment. Work performed in the US is outside this rule. The withholding is a credit toward possible Canadian income tax, not a final tax; a Canadian return may still be required.
Self-employed · Partnerships · Corporations
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