A Canadian [citizen] independent contractor, living in Canada, will take on a US client. The contractor is operating under their sole proprietorship business name which is distinct from their actual name (not sure if that impacts the situation or not). The contractor had previously lived and been employed full-time in the US so he has a SSN and US bank account.

Should the contractor provide the client with the bank details of a US account (then transfer up into Canada) or a Canadian account?

Of particular interest here is how the decision affects a US income tax return, as well as residency determination in the US.

Update: The contractor is not a US citizen.

Possibly related (very close match but does not specify Canada): Receiving money in US for work performed overseas

And: Taxes for a foreign freelancer getting paid in the USA

  • Is the contractor a us citizen?
    – jmoreno
    Commented Mar 15, 2019 at 0:28
  • @jmoreno nope, just Canadian.
    – tar
    Commented Mar 15, 2019 at 0:32
  • It sounds like you are dangerously close to asking how to avoid getting caught underreporting income ("business name which is distinct from their actual name" "Has a US SSN" "how the decision impacts a US income tax return")... keep in mind which bank account is paid doesn't change where the work was completed, which is what matters for most purposes. Commented Mar 15, 2019 at 0:38
  • 1
    @Grade'Eh'Bacon underreported how, can you clarify? Work is being done in Canada by a non US resident using their sole prop (required by Canada since a HST number is necessary)
    – tar
    Commented Mar 15, 2019 at 1:05

2 Answers 2


I suggest that you charge them an amount in US dollars. It will likely complicate things on their end if you charged in Canadian dollars.

Then have them wire the US dollar amount to your Canadian bank. The bank will handle the currency conversion for you. You probably won't get the best conversion rate, but it keeps the process very easy for you.

You won't have to pay any US income taxes since you live in Canada and are doing the work in Canada. (If you have a US Green Card then double check this last statement because that could possibly change the situation...)

  • Yes, could get paid directly to a US funds account in Canada. Are you aware of any complications or concerns if the pay was sent to a US account before being transferred to Canada?
    – tar
    Commented Mar 15, 2019 at 18:09
  • I don't think it would cause you to pay income tax in the US but I'm no expert in that. Opening a US bank account seems like unnecessary work with no benefit. It would be helpful to know why you are even considering opening the US bank account. What do you hope to gain from it?
    – minou
    Commented Mar 16, 2019 at 13:12

I've been looking for this online and some posts do indicate that it doesn't lead to tax liability in the US, but I haven't found comprehensive info.

And to comment on the previous post (I couldn't leave a comment directly there), there are advantages to getting paid to a US account exactly because of the conversion rates mentioned in the previous post, there are other (legitimate) ways to transfer from US USD account to a Canadian CAD account online losing <1% in conversion rates compared to the market rate (e.g. VBCE online). If using the bank conversion, it could easily be 2-2.5% compared to the market rate. So I was also wondering about the same question, doesn't seem to affect tax liability in the US, but would be great to find more info on that.

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