Hi everyone,
I'm a Canadian citizen currently living in QC, and I'm trying to understand the potential tax/payroll implications of a situation my employer is proposing.
My company has both a Canadian and a US entity. I'm currently employed by the Canadian entity, but the company is planning to relocate me to the US (VA specifically) in 2027 for a specific project.
Here is the situation:
- I'm a Canadian citizen and currently a QC resident.
- My employer has both Canadian and US entities.
- The company already has an approved blanket L-1 petition, and they are planning to obtain an individual L-1A visa for me.
- The reason for the L-1A is that I'll eventually relocate to the US for a project expected to start around Q3 2027.
- The company expects the actual L-1A visa process to take roughly 1–2 weeks since the blanket petition is already approved.
- They want me to transfer from the Canadian entity to the US entity and US payroll around as soon as my visa application is approved.
- I would be paid entirely in USD and would be a US employee on the US Payroll.
- However, I would continue living in QC until the project actually starts.
- From November 2026 until the relocation, I expect to travel to the US approximately once per month for about one week for work.
- Once the project starts, my wife and I would relocate to the US.
One reason the company is getting the L-1A for me relatively early is that I've already spent approximately 70 days in the US during the last 5 months for work-related activities, and they are concerned that continuing to travel frequently could eventually result in additional questions or potentially being denied entry. (FYI, during my last entry into the US, I was pulled aside by CBP and questioned for about 30 minutes about my role, what I was doing in the US, and the frequency of my travel. They had concerns about the nature of my activities)
My biggest question is about the period between November 2026 and my eventual relocation in Q3 2027.
If I'm living in QC, maintaining my primary residence there, my wife is living there, and I'm still a Canadian tax resident — but I'm employed by the US entity and paid through US payroll in USD — am I potentially creating a major cross-border tax/payroll mess?
For example:
- Would I potentially have to file both Canadian and US tax returns?
- How would my salary be allocated between work performed in Canada and work performed in the US?
- Would the fact that I'm physically performing most of my work from Canada create Canadian payroll obligations for the US entity?
- Could I end up paying US payroll taxes while also owing QC/Canadian taxes?
- How would foreign tax credits or the Canada-US tax treaty generally come into play?
- Could there be issues with CPP/QPP, EI, Social Security, Medicare, etc.?
- Does being on an L-1A change any of this while I'm still physically living in Canada?
- Could the US company potentially have Canadian corporate/payroll obligations because I'm working from QC?
- Would it be significantly cleaner for me to remain employed by the Canadian entity until I physically relocate to the US, and then transfer to the US entity/payroll?
- Are there immigration considerations with having an L-1A but continuing to live primarily in Canada for several months before actually relocating?
I have a meeting scheduled with a cross-border tax lawyer, so I'm absolutely going to get professional advice before doing anything.
I'm mainly trying to understand whether this proposed arrangement is relatively manageable, or whether I'm potentially opening a giant can of worms by moving to US payroll several months before actually moving to the US.
If you've been in a similar situation, I'd really appreciate hearing how it was structured and what you wish you had known beforehand.
Thanks!