A Canadian working in the US, but maintaining Canadian ties, pays to SS, and to CPP. While filing Canadian tax (and paying CPP) he/she gets credit for US taxes/SS. As a result he/she is effectively only paying Canadian taxes. In this scenario, will he/she collect SS and CPP at retirement?
Also, in the US, is there anything equivalent of Income Supplement of Canadian system (when CPP+OA are below a certain limit, balance is madeup by the supplement).
Jaspal
Paying to SS and CPP
Moderator: Mark T Serbinski CA CPA
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by Jaspal</i>
A Canadian working in the US, but maintaining Canadian ties, pays to SS, and to CPP. While filing Canadian tax (and paying CPP) he/she gets credit for US taxes/SS. As a result he/she is effectively only paying Canadian taxes. In this scenario, will he/she collect SS and CPP at retirement?
Also, in the US, is there anything equivalent of Income Supplement of Canadian system (when CPP+OA are below a certain limit, balance is madeup by the supplement).
Jaspal
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
If you otherwise qualify for SS and CPP, then yes, you will get both. There is no coordination of benefits between the two countries that I know of.
Sorry, don't know about your second question, though I doubt it.
Carson
A Canadian working in the US, but maintaining Canadian ties, pays to SS, and to CPP. While filing Canadian tax (and paying CPP) he/she gets credit for US taxes/SS. As a result he/she is effectively only paying Canadian taxes. In this scenario, will he/she collect SS and CPP at retirement?
Also, in the US, is there anything equivalent of Income Supplement of Canadian system (when CPP+OA are below a certain limit, balance is madeup by the supplement).
Jaspal
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
If you otherwise qualify for SS and CPP, then yes, you will get both. There is no coordination of benefits between the two countries that I know of.
Sorry, don't know about your second question, though I doubt it.
Carson
I would add this however, that unless you are self-employed, it is impossible to pay CPP and SS on the same income. CRA does not allow you to voluntarily pay CPP on wages on which SS has been paid.
And, even if you are self-employed, it would be quite rerasonable for SSA and CRA/HRDC to begin to question whay you are paying both. Most likely this challenge would come from CRA, since they would see that you are getting a tax CREDIT for SS contributions, and a tax deduction for CPP, and would wonder why, or worse, deny your SS tax as a credit, under the reason that this is not a required tax on your part.
The goal of these totalization aggreements is to have you pay SS/CPP in only one jurisdiction at a time.
There is no income supplement for SS.
<i>nelsona non grata... and non pro</i>
And, even if you are self-employed, it would be quite rerasonable for SSA and CRA/HRDC to begin to question whay you are paying both. Most likely this challenge would come from CRA, since they would see that you are getting a tax CREDIT for SS contributions, and a tax deduction for CPP, and would wonder why, or worse, deny your SS tax as a credit, under the reason that this is not a required tax on your part.
The goal of these totalization aggreements is to have you pay SS/CPP in only one jurisdiction at a time.
There is no income supplement for SS.
<i>nelsona non grata... and non pro</i>
Paying both not my intention but by process. If someone is employed in the US and pays US tax/SS; but by virtue of his/her ties with Canada ends up paying final tax in Canada (which, I presume, includes CPP contributions). Effectively he/she paid only Canadian tax, but books of SS also show his/her contribution.
Am I wrong somewhere?
Jaspal
Am I wrong somewhere?
Jaspal
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">but by virtue of his/her ties with Canada ends up paying final tax in Canada (which, I presume, includes CPP contributions). <hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Your presumption is incorrect.
CPP is a payroll tax (for employees) and thus, CPP is not being withheld from your US wages, SS is.
The CRA forbids you from subsequently electing to pay CPP on these wages for the very reason that SS was already paid.
Only a self-employed individual, by process, can end up paying SS and CPP on the same income, as I outlined above.
<i>nelsona non grata... and non pro</i>
Your presumption is incorrect.
CPP is a payroll tax (for employees) and thus, CPP is not being withheld from your US wages, SS is.
The CRA forbids you from subsequently electing to pay CPP on these wages for the very reason that SS was already paid.
Only a self-employed individual, by process, can end up paying SS and CPP on the same income, as I outlined above.
<i>nelsona non grata... and non pro</i>