I have been trying to search the forum for a related question but didn't find anything so hopefully someone can answer this for me.
I've relocated to the US division of my Canadian company and as part of my relocation I was advised to cut my ties to Canada so that I can become a non-resident of Canada for tax purposes.
This was not too hard to do since I do not have any major ties to Canada except for a couple of bank accounts which I have informed of my non-resident status.
My employer has given me the option to have US Social Security deductions or Canadian CPP from my pay. I realize there is an agreement with the US/Canada to enable a Canadian to continue to contribute to CPP while working in the states. I'm preferential to sticking with CPP but would it have any implications on remaining a non-resident?
CCP/SS Contributions as a non-resident
Moderator: Mark T Serbinski CA CPA
Just to be clear, The agreement to have Cdns continue to pay into CPP is only for transfers. If you go and work for a US comapny for any other reason, you must contribute to SS/FICA. You and the US division of comapny must agree to this arrangement of course.
It is not 'harmful' for you to pay into FICA, as you would get SS with as little as 18 months of work history, but given that Medicare payments would exceed CPP, your decison is not a bad one.
This would not constiutute any kind of residential tie. Besides, the tax treaty would find you to be overwhelmingly a US tax resident regardless of how mnay toes you had in canada.
It is not 'harmful' for you to pay into FICA, as you would get SS with as little as 18 months of work history, but given that Medicare payments would exceed CPP, your decison is not a bad one.
This would not constiutute any kind of residential tie. Besides, the tax treaty would find you to be overwhelmingly a US tax resident regardless of how mnay toes you had in canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks for the reply nelsona from what I gather, my company is applying for a "certificate of coverage" and I knew it was possible for me to opt for CPP as opposed to SS. I was just concerned that this might be considered a resident tie to Canada bt the CRA.
So just to confirm it's ok for me to go ahead with CPP.
The reason I wanted to stick with CPP was that I read that if you do not have 40 quarters of work in the US you don't receive the benefit, perhaps I've misinterpreted this..
So just to confirm it's ok for me to go ahead with CPP.
The reason I wanted to stick with CPP was that I read that if you do not have 40 quarters of work in the US you don't receive the benefit, perhaps I've misinterpreted this..
[quote="nelsona"] Besides, the tax treaty would find you to be overwhelmingly a US tax resident regardless of how mnay toes you had in canada.[/quote]
This is unrelated to my initial topic but just on a side note do I need to formally declare to the CRA that I wish to be considered a non-resident or will that take care of itself once I file my taxes.
This is unrelated to my initial topic but just on a side note do I need to formally declare to the CRA that I wish to be considered a non-resident or will that take care of itself once I file my taxes.
As you read the emigrants guide from CRA, you will see that what you must do is advise any Cdn payors that you are non-resident, like banks, RRSP manager, etc. You cannot hold a non-sheltered brokerage acount in Canada while resident in US due to securities regulations . But other than that you do not have to break any other ties, because of the treaty.
Do not send in an NR73.
Simply advise CRA next spring when you file your departure tax return.
Do not send in an NR73.
Simply advise CRA next spring when you file your departure tax return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing