Canadian COVID-19 Guidelines – Cross-Border Workers
On December 29, 2021, Canada Revenue Agency (“CRA”) updated its guidance with Part VII – Supplemental Guidance (1) which extends administrative relief for Canadian resident cross-border workers in respect of their 2021 income tax obligations. Individuals concerned about their potential income tax issues because of travel restrictions caused by the Covid-19 pandemic continue to obtain relief from unintentionally becoming a Canadian tax resident and potentially creating a permanent establishment for their non-Canadian employer.
This administrative relief also provides an alternative method for individuals to calculate their US and Canadian tax liabilities. As we discussed previously, this alternative method may result in a significant tax win for individuals for both the 2020 and 2021 years (2).
If you are a cross-border commuter impacted by the COVID-19 travel restrictions in 2020 or 2021, please contact us to determine your best tax strategy.
(1) International income tax issues – Canada.ca