Canadians Working In The United States

Determine whether the individual is a U.S. resident or non-resident alien for U.S. federal tax purposes based on the applicable residency rules, including the substantial presence test and, where applicable, the Canada–U.S. Tax Treaty.
File Form 1040 if treated as a U.S. resident for tax purposes.
File Form 1040-NR if treated as a U.S. non-resident alien and required to file a U.S. return.
Report U.S. employment income, investment income, rental income, business income, and other U.S.-source income, as applicable.
Review Form W-2, Form 1099, Form 1042-S, and other U.S. information reporting documents received during the year.
File applicable state and local income tax returns, depending on the state where the individual works, lives, or earns income.

Review state residency and non-resident filing requirements, particularly where the individual lives in Canada but works physically in the United States.
Determine the appropriate U.S. payroll withholding for federal, state, Social Security, and Medicare taxes.
Review Social Security and Medicare (FICA) obligations and potential exemptions or treaty/social security agreement provisions for qualifying Canadian workers.
Where applicable, review Form 8840 (Closer Connection Exception Statement) and Form 8843 or other residency-related forms.
Consider Form 1116 where applicable to claim a foreign tax credit for qualifying Canadian income taxes paid.
Review Canada–U.S. Tax Treaty provisions relating to employment income, residency, withholding, and allocation of taxing rights.
Maintain documentation supporting days worked in each country, employment contracts, T4s, W-2s, U.S. payroll records, travel records, and taxes paid.

File T1 General if the individual remains a resident of Canada for Canadian tax purposes.
Determine the individual’s Canadian tax residency status, including whether they remain a factual resident, become a non-resident, or qualify as a deemed resident/non-resident.
If a Canadian resident, report worldwide income, including U.S. employment income and other foreign-source income.
Report U.S. employment income using the appropriate Canadian-dollar exchange rate and maintain supporting documentation for the conversion.
Claim a foreign tax credit for qualifying U.S. federal and state income taxes paid, subject to Canadian foreign tax credit limitations.

File Form T1135 if specified foreign property exceeds the applicable reporting threshold.
Review whether U.S. financial accounts, investments, securities, rental properties, and other assets are reportable under Canadian foreign-property rules.
Report U.S. rental income, investment income, dividends, interest, capital gains, and pension income, where applicable.
Review CPP and U.S. Social Security coordination under the Canada–U.S. Social Security Agreement to determine the applicable contribution requirements.
Review EI and U.S. unemployment insurance implications based on the individual’s employment arrangement and work location.
Determine whether CPP contributions are required where employment is performed in the United States and whether a certificate of coverage or other documentation is relevant.
Review the treatment of U.S. retirement plans, including 401(k)s, IRAs, pensions, and other employer-sponsored plans, for Canadian tax purposes.
Apply the Canada–U.S. Tax Treaty where relevant to residency, employment income, pension income, withholding, and double-taxation relief.
Maintain records of U.S. workdays, Canadian workdays, T4s, W-2s, U.S. tax returns, state tax returns, payroll deductions, travel dates, and foreign taxes paid.