Assume that you are a Canadian resident and you perform work for a US based company in Canada and the US. The following will occur:
- The US employer must allocate your total employment income between Canada and the US, based on the number of days worked in each country. This means that you will be issued both a W-2 and a T4 slip at the end of the year.
- You will be required to report the employment income shown on the W-2 and T4 slip on your Canadian tax return.
- You will also receive a Foreign Tax Credit in Canada for taxes paid in the US (Federal and State).
