I moved to the US but kept my Canadian clients. Which country taxes that income?

The US, on the work you actually perform there. This is the part people find counterintuitive: the source of services income follows where the work is done. Where the client sits, where the invoice goes and which bank receives the money are all outside the test. Sitting at a desk in Florida serving a Toronto client produces US-source income. There is a narrow exception, and it needs three separate conditions met together.

Why doesn’t the client’s country decide it?

Because the statute keys source to performance, and says nothing about the payer’s location. The rule is one clause long and it is the whole foundation of this question. Everything people instinctively reach for, the client’s country, the currency, the invoicing entity, is absent from it. What matters is the physical place the labour happened.

“Compensation for labor or personal services performed in the United States” IRC 861(a)(3), listing items of gross income from sources within the United States

That has a practical consequence worth stating plainly. Keeping your Canadian client base after a move is not a way of keeping the income Canadian. The relationship stayed the same; the place you work changed, and the place you work is the thing the rule measures.

Is there an exception for small amounts?

There is, and it’s narrower than it first looks because all of its conditions apply together. The statute says compensation for services performed in the US is not US-source only if the person is a nonresident alien temporarily present for no more than 90 days in the year, and the compensation does not exceed $3,000 in aggregate, and the contract condition is satisfied. Miss any one of the three and the exception is unavailable.

“except that compensation for labor or services performed in the United States shall not be deemed to be income from sources within the United States if, (A) the labor or services are performed by a nonresident alien individual temporarily present in the United States for a period or periods not exceeding a total of 90 days during the taxable year, (B) such compensation does not exceed $3,000 in the aggregate, and (C) the compensation is for labor or services performed as an employee of or under a contract with” a specified foreign-connected payer IRC 861(a)(3)

Condition	What it requires	Met by someone who has moved to the US?
(A) Presence	Nonresident alien, temporarily present, 90 days or fewer in the year	No, a person who has moved is neither temporarily present nor typically a nonresident alien
(B) Amount	$3,000 or less in aggregate	Rarely, for anyone with a real client base
(C) Payer	Employment or contract with a specified foreign-connected payer	Sometimes, but it never stands alone

Notice the first row, because it usually ends the analysis before the dollar figure matters. The exception is written for a nonresident alien making a short visit. Someone who has moved to the US and is building a life there is generally outside it from the start, whatever the amounts involved.

What about the Canadian side, and GST or HST?

Both are separate questions and this page deliberately does not answer them. The US sourcing rule above tells you that the income is US-source. It tells you nothing about whether Canada also has a claim, which turns on your residence status after the move and on whether you have a permanent establishment there. Those are distinct analyses with their own tests.

• Whether you are still a Canadian tax resident, which is the prior question for the whole Canadian side
• Working remotely for a US company as a Canadian, the mirror-direction version of this problem
• Whether you owe US self-employment tax as well as CPP

Sales tax is its own regime again. Whether a GST or HST registration continues, ends, or produces zero-rated supplies after you leave is decided by the Excise Tax Act rather than by anything on this page, and it is worth getting a direct answer on rather than inferring one from your income tax position. The two do not move together.

What should I do next?

Work out where you physically performed the work during the year, because that is the fact the US rule turns on and it is often the fact nobody wrote down. If you moved part-way through a year, that split matters more than anything about who the clients are. Then treat the Canadian side and the sales-tax side as separate questions with their own answers rather than assuming they follow the US result.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.