Paying a foreign person

I'm not aware of any changes. He is not subject to US tax per Article VII of the US-Canada Income Tax treaty. That is established on the W-8BEN.

As a Canadian tax person, the only question I could see is if you are operating this contract not as an employee - employer relationship but firmly within the grounds of contracting. (Are you exerting control over the contractor similar to an employer over an employee? Because, if so, you then have a physical presence in Canada and must file Canadian returns too.)

A slightly separate topic is to ensure that this is an arms length business relationship as otherwise Canadian TOSI (tax on split income) could be triggered for both of you.

Canada does not (yet) require a 1099-misc equivalent... Though the 1042-S will be shared by the IRS to the Canadian government. Your contractor should be aware of this and also know that the US income will trigger their obligation to register and file Canadian Sales Taxes.

Hope that helps you.

There is a fixed list of deliverables and no day-to-day management so I think it's clearly a contract.

Oh, yes, he knows that.

Wait, what Canadian sales taxes? He's in Quebec, we're outside Canada so I am fairly sure that GST doesn't apply and I know that TVQ doesn't. He'll owe income taxes, but that's not our problem.

I sure hope it doesn't because the non-profit has no GST number to reclaim tax paid. Having gotten a GST number for another US business of mine I am not eager to do it again.