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Living in Canada while Working in US

I have my PR and live in Seattle, ~2 hrs south of Vancouver. For some reasons, I cannot relocate permanently to Canada for the next three years.

I am considering living in US while making frequent trips to Canada. One idea is to take a small shared bedroom in Vancouver and spending 2-4 days a week there (working remotely) while commuting back to US for the remaining days.

How does this impact my tax situation ? If I manage to spend < 183 days in Canada, do I avoid paying any taxes there ? I will continue to pay my US taxes. What if I exceed 183 days ? Does the tax treaty kick in ?

Second, my entire family has a PR. Do they all have to do this with me ? Or is it possible for only one of us (myself) to start counting against the 730 day requirement.

Also open to doing the other way around. Rent a small space in Seattle and spend 2-4 days there, while my family is settled in Vancouver.

We plan to move for good after 3-4 years depending on where we are with the day count.

Do you know someone who has adopted a similar approach ? I’d love to talk

If you live in Canada more than 180 days you become tax resident. Your employer in US will deduct your tax in US tax. Then after you pay tax in US (as resident I presume), you take that money as deduction in Canada and basically pay the difference if any.

US taxes are higher than Canada these days contrary to the popular belief.

Hi @sahilsethi … i am in a similar situation. I plan to move ahead and get family over later. Let me know if you like to chat. i am trying to gather as much information as possible towards this.
Thanks

It’s actually 183 days or more not 180. I know because I’ll be splitting hairs on this and need to ensure I pay taxes only in the U.S. Regarding taxes being higher in the U.S. than Canada, no, that’s incorrect. Taxes are lower, but what pushes the numbers over the top is the cost of medical plans etc., the cost of rent and all the other things. I did the numbers very carefully. When I return to Canada, I’ll pay more of percentage in taxes, but won’t be paying $8k a year in medical plan deductions and related. I also won’t be living in a region like I am now that gouges renters. It’s seems they get you at every turn here. And if we were to have a catastrophic medical incident, I’d could be buried in medical deductions in the amount of thousands of dollars. If you can’t make a $150k or more it really seems to me that it’s not worth trying to live in the states.

Are you sure taxes are lower in US? If you move from California to Alberta you will pay less in Canada without even adding the medical insurance stuff to US taxes. Also, are you including 7% social security + medicaid tax in the US? Most websites that do tax calculation leave this one out.

I’ve been using Smartasset paycheck calculator for Arizona and Neuvoo paycheck calculator for a comparison with Alberta for example. There is a clear $6000 less take home pay in Alberta using $70k usd in Smartasset versus $92,690 cdn in Neuvoo. So it seems clear that the taxes are much higher in Canada. I’m more than open to be corrected on this. Smartasset is showing pretty much the same as my current deductions on my paystub. The problem is with my cost of benefits. Medical costs me $6300 a year. And there is the worry of having a few thousand dollars available for deductibles on major medical issues if needed.

Are you including the 7% for social security tax? For some reason they don’t consider that as tax. Also use the same value in both say 70k in both calculators, then see the results. Don’t convert dollars.

I have to convert the 70k USD to CDN. I’m doing a real world comparision, earning $70k USD while living in the US or earning $70k USD(from a US company) while living in Canada. That has to be converted to CDN $ to pay taxes properly.

If you want to compare income tax you have to use the same dollar amount otherwise you are not comparing the same tax brackets.
I put San Francisco California in SmartAsset and it shows a tax rate of 29.20% for 100k and Toronto Ontario in Neuvoo shows a total tax rate of 27.9% for 100k. That compares the same earnings in two cities and clearly tax rate is lower in Canada in that case.

Cost of living comparison is a whole another thing, that takes in to account things like healthcare cost ( in US there is monthly permium, copay, deductibles etc), housing cost, food, gas, lifestyle and many other things - and yes converting dollar probably help in a better comparison for that.

“If you want to compare income tax you have to use the same dollar amount otherwise you are not comparing the same tax brackets.”

No, it’s not about tax brackets, we’re comparing take home paychecks from two different countries based on the same US dollar amount with two different tax systems. You can’t use that US dollar for a Canadian comparision. It has to be converted to CDN.

Hi Sahil,

My name is Sanjeev and myself and my wife are in the same boat. We both work in Seattle and almost 2 years on our PR is complete but we have been unable to move to Canada. We plan to do so in the next 2 months. We plan to live in Canada and commute to the US for work.

I would like to talk to you to learn from your experience in terms of commute and border crossings etc. and places to live in Vancouver.

If you think you can help, please feel free to directly email me at deepsanj1215@gmail.com. I would definitely like to catch up .

Thanks in advance for your help.

Regards,
Sanjeev