IRS Publication 597

A document published by the Internal Revenue Service (IRS) that provides information on the income tax treaty between the United States and Canada. The treaty was signed in 1980 and is intended to streamline the process of paying tax on income generated in Canada. Citizens of the United States may be exempt from Canadian income tax if the income received for services is less than C$10,000 (rules are different for entertainers), if the U.S. citizen was present in Canada for less than 183 days over the past year, or if the income is paid by the United States.

IRS Publication 597 does not get into specific details regarding Canadian income tax laws or Canada's treatment of the treaty. It is designed to give the U.S. perspective of the treaty, and to inform U.S. citizens that they might be liable for income tax to Canada.

Without a treaty in place, it is likely that U.S. citizens earning income from Canada would pay higher taxes.