Welcome to Shaun Luttin's public notebook. It contains rough, practical notes. The guiding idea is that, despite what marketing tells us, there are no experts at anything. Sharing our half-baked ideas helps everyone. We're all just muddling thru. Find out more about our work at bigfont.ca.

Work in the USA from BC, Canada

Tags: working-from-home

Wednesday, July 2, 2014 8:26:07 PM

Take-home Messages

  • Personal service income that’s foreign sourced requires neither a TIN nor Treaty Benefits.
  • Foreign sourced means the service provider is physically located outside the US while doing all work.
  • The US does NOT tax foreign source income.
  • To the employer, it’s a business expense. They need neither to report nor withhold.
  • It’s a different circumstance if the service provider enters the US to install, demonstrate, present, or otherwise do any work.
  • The Tax Law Area of the International Taxpayer Service Call Center is  a terrific resource!
  • Call 1-267-941-1000 and use option 4 and then option 4. There’s little wait time.

My Questions (and Answers)

  • I need a U.S. taxpayer identification number, because a potential employer needs a completed W-8BEN form, including Part II on Treaty Benefits. Should I apply for a SSN or ITIN?
    • That little question lead to a very thorough, unexpected answer – be sure to read to the end, because I was misguided in my question.
    • Answers are from the International Taxpayer Service Call Center.Use an ITIN unless you’re a US Citizen or resident.
    • Start with an “informal” tax number, to get started with your employer.
    • Then start the process for obtaining an ITIN.
    • Thank you helpful call center person #1!
    • The ITIN is not designed for income but can be a hack to make it work for contractors.
    • The SSN is for citizens or those who are sponsored employees.
    • Questions that the agent asked me:
      • Are you applying for a Green Card / VISA? NO
      • Have you applied for an ITIN in the past? NO
      • Do you possess any US identification? NO
      • Are you eligible for a SSN? NO (because I’m not a US citizen)
      • Will you be physically present in the US to do any work? NO
      • “Well, in that case, this will be easy…”
    • Personal service income that’s foreign sourced does NOT require Treaty Benefits nor a TIN…
    • because the US government will NOT tax it.
    • This is based on the location in which the person completes the services, which in this case, is in Canada.
    • When my employer pays me, in this case, they have neither to report nor withhold. It’s a business expense.
    • This might change if my physical presence moves into the USA for an installation, demonstration, or presentation, for instance.
    • Then we’d need to look at the specific circumstances.
    • Further, if the employer wanted to hire me as an employee, then they would sponsor me, and I would apply for a VISA and SSN.

Useful Contacts