CPP contributions for US resident

[jordan]

Saw a lot of posts about CPP benefits, but not about contributions.

I am currently a US resident for tax purposes, but had Canadian self-employment income in 2009. Do I need to make CPP contributions on that self-employment income? The CRA tax guide suggests no (just by looking at their symbol coded system), but the T1 form for non-resident and schedule 8 suggest yes for an answer.

Any advice on this would be appreciated. Thanks!

[nelsona]

As a US resident, your self-employemnt income likely is not even taxable in canada, by treaty. But even if it is, your are not subject to CPP due to the social security treaty.

Visit the SSA internationalk website, and they describe the steps to avoid Cdn CPP for US residents.

You will of course have to pay SE tax on this income on your 1040.

[jordan]

Thanks a bunch for the input. I get the CPP part.

I am curious however as to why my self-employment income (consultant) from Canadian sources would not be taxable in Canada (I understand world income is taxed in the US). I was under the impression that everything paid out by a Canadian firm for consultant work was taxable in Canada. They even withheld 15% on the payments. Thanks!

[nelsona]

Being withheld and owing tax is 2 separate issues.

If you are self-employed in canada and are not in canada for more than 183 days in any 12-month period, you are most likley not taxable in Canada on that income. This is a treaty issue.

You would file a non-resident return at year-end and get all the money back. There are ways to avoid the withholding...

http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... s-eng.html

[jordan]

I'll dig into the treaty... thanks!