Jérémy Levasseur, fiscaliste junior

Self-employed income from the USA earned by a canadian resident

US taxation  —   — Share

10

Question :

Hello,

I have a question for you…

It’s been ages since I last worked as a self-employed person.

I worked for two clients in the USA in 2021, I was not an employee for their US company.

I believe that I don’t have to file any USA tax returns.

Could you confirm this?

Thank you,

Tiffany

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Answer:

Hello Miss Tiffany,

I hope you are doing well?

Generally speaking, the tax treaty specifies that the self-employment income is not taxable in the U.S.A. unless you conducted your business through a permanent establishment in the USA. A permanent establishment is an office, a place of business, etc. that a person will use to conduct his work. With the information provided, that does not seem to be your case, unless I’m wrong.

However, if you spent a number of days there, you can also be deemed to have a permanent establishment in the USA.

We need additional information to further analyze your days present in the USA (for any purpose) in the last years in order to give advice.

Also, there may be tax withheld in the USA by the clients (payors). In that case you will need to file a return to have it refunded.

Note that we can help you eliminate tax withholdings for future contracts so that you don’t need to wait at the end of the year to file a return and get your refund.

Note that the tax law and the tax treaties have multiple clauses and interpretations, and that I cannot guarantee the tax treatment unless we have all the facts. This can be done through consultation. Also, please note that all states have their own tax code. Some of them do follow the tax treaty and others don’t. It will be important to know the state(s) you will make business in to validate the status.

Regards,

Jérémy Levasseur