H-1B Visa Taxes for Canadians
Residency, the first year, FICA, state tax, and why many Canadians choose TN instead
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
H-1B status lets U.S. employers hire foreign workers in specialty occupations. For a Canadian on an H-1B, tax follows the substantial presence test: a full-time worker becomes a U.S. tax resident, taxed on worldwide income, with a dual-status or elected full-year return for the first year. Many Canadians use TN status instead, which has a simpler process.
On this page
The tax picture
| Question | Answer (2026) |
|---|---|
| Does the H-1B make me a U.S. tax resident? | The substantial presence test does — full-time H-1B workers typically meet it |
| First year | Dual-status return, or full-year residency by election with a spouse (the nonresident spouse guide) |
| FICA | Yes, on U.S. wages |
| State tax | Your work state's tax — none in Florida |
| Green card path | H-1B allows dual intent; a green card later makes you a resident under the green card test regardless of days present |
H-1B versus TN
For tax, the two are treated alike once the substantial presence test is met; the differences are immigration ones — TN requires non-immigrant intent and a listed profession, while the H-1B allows dual intent toward a green card.
The Canadian side
Leaving Canada to work in the United States usually ends Canadian residency if your home, spouse, and dependants move with you (the factual residency guide) — triggering the departure tax on most non-registered property (the departure tax guide). Keeping significant ties in Canada can leave you a dual resident, with the treaty's tie-breaker deciding (the Form 8833 guide). Close or plan around the TFSA before you become a U.S. resident (the TFSA for non-residents guide).
Visa eligibility and status questions are for an immigration lawyer; this article covers the tax side.
Frequently asked questions
Is an H-1B worker a U.S. tax resident?
Usually, once the substantial presence test is met.
Do I pay Social Security tax?
Yes, on U.S. wages.
Is the tax different from a TN?
No — residency and tax work the same way; the differences are immigration ones.
What happens to my Canadian accounts?
They become reportable on FBAR if they total more than US$10,000 at any time in the year, and on Form 8938 above its higher thresholds.
Official sources
U.S. Citizenship and Immigration Services explains: “This nonimmigrant classification applies to people who wish to perform services in a specialty occupation, services of exceptional merit and ability relating to a Department of Defense (DOD) cooperative research and development project, or services as a fashion model of distinguished merit or ability.” — U.S. Citizenship and Immigration Services, H-1B Specialty Occupations, https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations
The IRS explains: “You were physically present in the U.S. on 120 days in each of the years 2023, 2024 and 2025. To determine if you meet the substantial presence test for 2025, count the full 120 days of presence in 2025, 40 days in 2024 (1/3 of 120), and 20 days in 2023 (1/6 of 120).” — Internal Revenue Service, Substantial presence test, https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle first-year returns for H-1B workers, Canadian departure returns, and U.S. account reporting setup. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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