Side Job while on Full-time TN

H

help__seeker

Member
Hi,

Let's assume:

(1) I am regularly working full-time on a TN for a US company and I'm in the US.
(2) I desire to do some part-time work for my own Canadian business (i.e. a contract) while I'm in the US

Is doing (2) permissible concurrently while (1) is true? I don't think think so. I was reading that one can't 'telework' for a foreign company (including their own) while in the US concurrently while (1) is true.
 
No. This would not be permitted. It can work as an employee of some other foreign firm under certain , but not one which you control as you have become, in essence, a US firm by its control being in US.
 
Thanks, Nelsona - that's the answer that I was looking for.

It's also possible to establish a part-time TN assigned to a second US-based company (X) and subcontract foreign work (etc) through them. But then the problem becomes 'double taxation' - tax first applied at source (for the subcontracted work) to X, then X paying employee taxes on income going to their employee, and then the taxes that the employee pays on the income that they receive from X. So $60K of gross income (at source), can become $40K net (after company's own taxes are applied), which can then become $20K net to the employee (after employee pays their own taxes).

It's also possible to establish a contractor/1099-based TN (contractual employment) for a willing US-based company sponsor, but that'll get more scrutiny, especially if it's longer than 1.5 years. With this approach, I'm not sure if the employer would pay employee taxes on income going to the 1099 contractual employee like there would be for a W2 employee.
 
I'm not sure what you are talking about with double taxation in any case. Any tax withheld by the firm would be credited towards your personal income tax calculated on 1040 at tax time.

But in any case these would require a second/third/fourth etc TNs. How you are paid would be up to negotiation between you and the client. You would establish a US business to do this work as a contrator, not your existing Cdn one.
 
Thanks, Nelsona. I meant that:
(1) a firm (X) has a client (Y)
(2) once Y pays X an amount (W), X has to pay their own taxes (part 1) on (W) immediately (based on their own yearly income).
(3) then X takes the net on W, call it (Z), pays their employee from (Z), while further deducting it to pay employee's FICA, SS, State etc (part 2).
(it sounds like you're saying that the first taxation (part 1) is credited towards the second taxation (part 2)

The other concern is that when there isn't subcontracting work active/available, the US firm that hired me would need to still pay me some amount for me to stay in status. An irregular/low payment stub could be a flag. Not sure that it's possible to do commission-based payment on a TN.

I don't think I'd be able to establish a US business on a TN, but I'd simply need a second part-time TN that accepts me as a regular employee (W2) or contracting employee (1099? - riskier to greenlight, I think).
 
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You are talking about working for an agency, vs, working for your self. Of course an agency gets their own cut of the clients payments.

You do not have to work for an agency on TN, you could contract yourself out. You can do this with all your clients. You do not ever need to be a W-2 employee on TN.

And, no an agency cannot keep you on TN if you are not working. This is known as 'benching' and is not permitted.
 
Thanks, Nelsona.

To contract myself out on a TN, I'd assume that I'd need to create a business as a temporary resident, and then all immediate clients would need to be a US firm that sponsor the TN for 1099 use. Now if there was a foreign client firm that I wanted to work for, however, they'd need to contract with a US firm that I contract with in order to work with the foreign firm (indirectly), so maybe I'd be forced into the agency approach (me->US agency->foreign firm) for that case.

I'd assume that reduced pay (say, $200/mo from $3000/mo) wouldn't be considered benching if I did light work while waiting for meatier work to arrive, but it could raise flags.
 
You would not need to incorporate, you could be self-employed.

DHS sees through these phony schemes to 'pay' non-working foreign workers.
 
This link has some more info ..more reading

rjimmigrationlaw.com

Can a TN Visa Holder Work on a 1099 or W2 Basis?

Neither the USMCA (NAFTA) nor USCIS defines how a TN Visa holder must be paid. They simply state that there must be employment or contractual arrangements between a foreign national and a US entity. Only self-employment through a US company is barred. We discuss compensation and self-employment...
rjimmigrationlaw.com rjimmigrationlaw.com
 
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