Canadian Talent and Companies in Austin
Austin draws Canadian founders, software developers, engineers and researchers, and its companies hire Canadian staff who may stay in Canada or move here. Canadian firms also open Austin offices to sell into the U.S. market and join the technology network. BOMCAS focuses on Canada–U.S. tax for these people and companies, and for Austin residents who kept Canadian investments, pensions or property.
Treaty, residency and reporting basics are on the Texas cross-border page; this page applies them to Austin's Canadian talent and companies.
Founders Moving a Company
A Canadian founder moving to Austin may keep a Canadian corporation, create a U.S. parent or subsidiary, or exchange shares in a reorganisation. Each route can trigger Canadian departure tax, U.S. reporting of the Canadian company and transfer pricing for intellectual property and services. A Canadian company controlled by U.S. residents can become a controlled foreign corporation for U.S. purposes, with annual Form 5471 and possible current tax on some income even if no money is distributed. The structure should be settled before the founder becomes a U.S. resident.
Developers and Remote Teams
An Austin company hiring developers in Canada needs to decide whether they are contractors, employees of a Canadian subsidiary or employees through a local provider. A Canadian employee working from home can create Canadian payroll and corporate tax obligations for the Austin company. On the U.S. side, payments to foreign contractors are usually documented with Form W-8BEN or W-8BEN-E rather than a W-9, and research costs incurred outside the U.S. remain subject to 15-year amortisation.
Canadians Working in Austin
Engineers and certain other professionals may come on TN status, while founders and managers use other work categories. Once they meet the substantial presence test, they report worldwide income in the U.S. Canadian options and pensions, departure tax and the year of the move need coordination between the two returns. TFSAs and RESPs do not keep their Canadian tax exemption in the U.S., and Canadian mutual funds can be PFICs.
University Researchers and Students
Canadian graduate students and researchers at UT Austin may be nonresidents for U.S. tax for a period depending on their visa and years present. Some days do not count toward the substantial presence test, and Form 8843 is usually required to claim that treatment. Treaty benefits for wages, scholarships and research grants depend on the type of payment and the person's residence before arriving. We review status before choosing Form 1040 or 1040-NR.
Austin Residents With Canadian Investments
RRSP and RRIF growth remains deferred for U.S. tax under the treaty, but withdrawals are taxable. CPP and OAS paid to U.S. residents are taxed only in the U.S. Canadian bank, brokerage and pension accounts count toward FBAR and Form 8938, and an inherited Canadian property may bring Form 3520 reporting.
Selling Into Canada From Austin
Austin software and hardware companies selling to Canadian customers may need to register for Canadian GST/HST once sales pass the small supplier threshold, even with no office there, and digital services sold to Canadian consumers have their own registration rules. Canadian provinces have separate sales taxes, some with their own registration. We flag these obligations and work with Canadian advisers to register when needed.
Common Filings
- Forms 1040, 1040-NR and 8843.
- Forms 5471 and 5472 for companies.
- FBAR, Form 8938 and Form 8621.
- Forms 3520 and 8833.
- Dual-status and departure-year returns.
Austin Cross-Border Tax Questions
Should I move my Canadian company when I move to Austin?
Plan the structure first. Keeping it, creating a subsidiary or reorganising can each create different tax in both countries.
Can an Austin company hire a developer in Canada as a contractor?
Only if the worker is genuinely independent. An employee can create Canadian payroll and corporate tax duties.
Do UT students file Form 1040?
Some are nonresidents and file 1040-NR, often with Form 8843. It depends on visa and years present.
Is a TFSA still tax free after moving to Austin?
Not in the U.S. Its income is taxable on the U.S. return.
Talk to BOMCAS About Cross-Border Tax in Austin
The U.S. company files its business return and the founder or employee a personal return. Subscription sales tax, monthly books and payroll still run here. Plan the structure before crossing the border, and use late filing to repair missed forms. The rest of our statewide coverage runs through business filings, personal filings, sales tax, bookkeeping, payroll services, planning ahead and back tax work, with the Texas overview as a starting point.
Tell us what you are working on in Austin and BOMCAS will reply with the next steps and the records needed for a quote. Send a note from the contact page or the form below, call 780-667-5250 or write to info@bomcas.ca. The Austin overview covers every Austin service. This is general information, not advice for a particular taxpayer.