I need a help to figure out how a Canadian working in USA with fixed residence in Canada ONLY has to pay USA taxes and what ones.

My case is, I am going to live in Windsor, Ontario, Canada and I am going to travel daily to Detroit to work. I am not going to stay in USA for more than 10 hours and I am going to get back to Canada every evening.

I know I will have to pay federal tax in USA and I will have to claim its return in Canada.

My doubts are regarding USA social and Medicare taxes and also that one related to Michigan state.

Am I subject of these last taxes? If so, I am allowed to claim their return somehow?


You're subject to all the US taxes. You'll be considered US resident for tax purposes, based on the substantial presence test. The fact that you stay partial days doesn't matter, each day during which you've been present in the US at all counts.

  • Thanks littleadv. I read somewhere that there is an agreement between USA and many countries including Canada that free workers from Social Insurance and Medicare. Is it correct? Do you know if there is a way to claim the return for tax paid to Michigan state? Jun 4 '16 at 10:18
  • @EmersonSoares no, that is not correct. You're thinking about a "totalization agreement". It exempts you from paying the social security taxes in the other country, other in this case being Canada, not the US. ssa.gov/international/Agreement_Pamphlets/canada.html#coverage
    – littleadv
    Jun 6 '16 at 5:09
  • I got it. Well, what matter in the end is do not pay tax in both sides, and so far, based on my understanding, the only tax that I cannot escape is Provincial/State ones. Jun 6 '16 at 9:14
  • Days that he commutes to work in the US are not counted in the Substantial Presence Test, if he commutes more than 75% of his workdays. irs.gov/publications/p519/… I am also not how whether he is resident or not for federal tax purposes matters for his questions.
    – user102008
    Jun 9 '16 at 2:06

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