[kemalmemal]

Hi,
My wife and I both Canadian citizens. She got an offer from University of California to do a research for 1 year. She has J1 (DS-2019).

She can get me a J2 visa to stay with her while she is there. My Canadian employer is OK for me to work remotely (I am a software engineer) from California to Canada.

My question are :
1) Do I need to get a work permit to work for a foreign company? I guess I don't since I am not going to work for US company.
2) Do I have to pay taxes to Federal and California state taxes on my foreign income? If I not misundertading the J1 and J2 visa holder do not pay taxes on their foreign income.

Thanks in advance.

Kemal

[MukatA]

1. Yes.
2. Normally, the income is earned in the U.S. so it will be subject to the U.S. taxes. You must first pay taxes in the U.S. and if you are required to report that income in Canada, then you will claim credit (on Canada tax return) for taxes paid in the U.S.
You should check with some one with full knowledge of tax treaty between the U.S. and Canada.

[kemalmemal]

Hi Mukata,
Thanks for your quick response.

I have another question.
My wife is going to be paid be paid by University of California which she will pay US & State taxes on this income. Beside this she was also awarded fellowship from Canadian government.

Does she need to pay taxes to IRS and California state on this fellowship from a foreign government? If I am not mistaken she does not need to pay taxes to IRS (based on publication 19) on this award/fellowship but I am not sure about California state tax.

Thanks.

[AtlantaTaxExpert]

California will NOT honor any provisions of the tax treaty, so the income earned while resident of California (both your income AND her income) IS subject to California state income tax.

Contact the California Franchise Tax Board by email and ASK if the award/fellowship income is taxable. They will normally respond to an email question within ten working days.