In some cases, the income tax agreement may even exempt individuals from paying certain taxes. For example, Canadian citizens who are considered non-resident foreigners and earn less than $10,000 while having TN visa status in the United States do not have to pay federal income taxes. The rules that a TN visa holder must follow for filing their federal taxes depend on their residency status. Whether a TN visa holder currently living in the United States is considered a non-resident alien or a resident alien depends on whether they pass the substantial attendance test. Holders of TN visas classified as resident aliens in accordance with the rules set out in the section below are subject to the same tax obligations as U.S. citizens. TN workers comply with U.S. federal income tax in the same way as U.S. citizens in terms of exemptions, medical status, etc.

They also file a W-4 with their employers. This depends on the tax resident status of the TN visa holder. If they are considered non-resident aliens and receive payments in the form of interest, dividends, rent, royalties or other non-remuneration allowances, 30% of the non-salary of federal income tax is withheld from them. However, this rate may be different for Canadian TN workers under the income tax agreement with the United States. Another potential TN employer may apply, on behalf of the individual, for a change in visa status to TN. [1] The procedure is to send the Form I-129 petition to the corresponding USCIS service center (California or Vermont) [25] for an amount of $460[24].