A a citizen of Canada who maintains her home in that country

A, a citizen of Canada who maintains her home in that country, is a traveling salesperson for a Canadian company. Many of her customers are in the US, and she spends about 125 days each year (out of 250 working days) in the US. Is A’s salary, or any part of it, subject to US tax under the US-Canada treaty?

Solution

The US Canada tax traety provides special ways in which a Canadian resident is taxed. The person will be exempt from US tax if:

The US employment income does not exceed US $10,000.

The person is present in the United States for less than 184 days and remunaeration is not paid by a US resident/establishment.

Since A is present for only 125 days a year, he is exempt from US tax. Moreover his salary is paid by a Canadian establishment.