# Being paid in UK while waiting for authorisation of employment



## ch1quaymunkey (May 11, 2010)

Hi there,

I am currently in the process of applying for a fiance's visa (K-1) so that I can enter the USA on an immigrant visa to get married. AFter getting married, I intend to apply for a green card so that I can settle in America with my wife. At the moment, the process is approaching the interview stage with the London embassy, etc. 

Presently, I am working for a very small (i.e., me and the boss) publishing company. My boss would very much like for me to continue doing a lot of the editorial work for him in the months following my move to the US, as this will mitigate the problems caused by my departure considerably for him; it would also be of enormous benefit to me, as otherwise I face having no income for at least three months, meaning my lovely wife will be the sole bread winner during that time. Almost all of the editorial work I currently do can be carried out anywhere, provided I have access to a computer and broadband. The arrangement would be that I do what work is necessary for my boss, and he continues to pay me via BACS into my UK bank account. Obviously, I can draw on these funds via my debit/credit cards while in the US, so I can contribute towards bills and the general cost of living. 

I would declare any earnings during this period to the Inland Revenue (HMRC) at the end of the UK tax year and pay whatever tax I owe. I am relying on the fact that the UK-US reciprocal tax agreement means I wouldn't have to pay tax on these earnings again to the IRS (someone please correct me if I am wrong!).

Once I have my authorisation of employment (via the I-485 application) I am able to be employed directly in the US, and I would then declare my UK earnings to the IRS (I think, is that the best option?). At this point, I would hope to find a job with a US employer and my work for my former boss would come to an end.

The principle is that the work I am doing is entirely independent of my physical location, i.e., I am not working for a US employer and any earnings and tax are paid in the UK. My question is: would I be infringing the conditions of my immigrant status while I am still awaiting my authorisation for employment? I really cannot find a definitive answer anywhere, and even calling someone at the visa helpline in Edinburgh failed to get a clear response. I really hope someone can offer some advice, or at least suggest another place to go to find a clear explanation of where I stand. 

Many thanks!


----------



## MarylandNed (May 11, 2010)

*This might help*

When contemplating cross border telecommuting, whether between countries such as Canada and the United States, or just between States or Provinces; it's important to realize there are differences in the manner with which each country collects taxes.

Under the Canadian system, taxes are based on residency not citizenship.

If you have been in Canada more than 183 days your income, no matter the source, is taxable in Canada. There are exceptions for government employees.

In the United States taxes are based upon where you perform the work and citizenship. So based on citizenship the U.S. can tax its citizens in Canada. Where you perform the work relates to tax issues on state levels.

There is a tax treaty in place between Canada and the United States which sets out the circumstances for who has claim on income taxes and who must pay the respective country. There are provisions to prevent double taxation.

Different scenarios that may arise for cross-border telecommuters:

Q. I am a US government employee whose spouse has been transferred temporarily to Canada or is studying in Canada. I was telecommuting part-time and now to avoid traffic delays at border crossings, have been approved for full-time telecommuting. Will I have to pay Canadian income tax on my earnings?

A. Simply put - no. Under the Canada - United States Tax Treaty, government employees are not required to pay taxes to Canada. Article XIX states that "remuneration, other than a pension, paid by a Contracting State or political subdivision or local authority thereof to a citizen of that State in respect of services rendered in the discharge of functions of a governmental nature shall be taxable only in that State."

Q. My partner has been transferred to Canada for a work project or to study and my employer will allow me to continue my job in a telecommuting capacity. I will on occasion make trips to the office for meetings or other work reasons. Do I have to pay Canadian income taxes? We still maintain a residence in the United States and return on weekends and holidays.

A. As this person is not a government employee this situation is a little trickier. As Canadian taxes are based on residency, you will need to prove that you are not a resident of Canada. One key is that you will be making trips to the home office and that will reinforce that you are not a resident. Keeping a residence in the States and returning at regular intervals is also wise. There is a form you must complete that will be used by Revenue Canada to determine your residency status. The form is "Determination of Residency NR 74" that you can download and review to see what is looked for.

Q. I am a Canadian working as an independent contractor in a telecommuting capacity for an American company. All my work is done in Canada; do I have to pay the IRS?

A. No. Since the American tax system is based on where the work is performed, you would not pay any taxes in the States. Be advised though that if you ever travel to the States, even for one day for work related matters you may become liable for tax payment in the States. You do need to declare your income in Canada on your taxes, remembering to convert it to Canadian funds.

Q. I am a Canadian and living in the United States. My employer is in Canada and I can use telecommuting to keep my job. Who do I pay my taxes to?

A. Unless you intend to give up your Canadian citizenship, you will still need to pay Canadian taxes on your income. You may also have to pay state income taxes, check with the state you are in, since not all states have income taxes.

Dealing with taxes on cross-border telecommuting is not easy and can be very confusing. Before you begin any cross border telecommuting venture, find out all you can about the tax implications for your specific situation. Contact a tax professional or local tax office and explain your situation.

You want to know exactly what tax implications you may face prior to your telecommuting arrangement starting.


----------



## Bevdeforges (Nov 16, 2007)

Be very, very careful with this. You become subject to US income taxes the moment you enter the US on an immigrant visa. What counts for the US tax authority (the IRS) is where you are physically located while you are doing the work. Thus, working for your UK employer while seated at a computer in the US is considered working in the US.

You could get away with it under your scenario if you were only in the US on a tourist visa (i.e. less than 90 days) and were going to return to the UK once your trip was done. But if you've entered on an immigrant visa, you've taken up residence in the US and any work you do there is subject to US taxes (including social security). If you aren't authorized to work in the US, you can't telecommute (not legally, anyhow). 
Cheers,
Bev


----------

