Disability CPP

figs1980 · Post by **figs1980** » Wed May 30, 2012 6:27 pm

Hello,

I am receiving Disability Canada pension plan every month in Canada. I would like to know if once i move to USA if i can receive the money in my
canadian bank and also do I need to report this to the USA? IF so, why should i do this if i am being taxed already. right now when i fill and disability cpp is my only source of incom, I do not receive anything back from the government. Please let me know. I would really appreciate it. thanks

figs1980 · Post by **figs1980** » Wed May 30, 2012 6:35 pm

Also, just wanted to let you know, i am a canadian citizen, i will not be working in USA. i will have ties in Canada, parents live here, i have friends here i have accounts there, to meet the residency and ties to canada. I would really appreciate any help... thanks

JGCA · Post by **JGCA** » Wed May 30, 2012 10:38 pm

If you are not moving to the US then you file as Canadian, if you are moving to US then you have to report this income to US and there will be tax credits for any witholding tax paid to Canada .

nelsona · Post by **nelsona** » Thu May 31, 2012 7:45 am

just to correct. if you move to US (thus becoming a US tax resident_ your CPP should only be reported and taxed in US (per treaty) and not in Canada at all.

figs1980 · Post by **figs1980** » Thu May 31, 2012 10:06 am

even if it is Disability CPP?

nelsona · Post by **nelsona** » Thu May 31, 2012 10:15 am

Yes, under Article XVIII(5). If your disability payment was non-taxable in canada, it would remain so in US. But if it is considered taxable income in canada, it would now only be taxable in US (and only at the 85% inclusion rate) IF you become a US tax resident.

The question becomes are you *really* moving to US -- legally -- or are you just wanting to more spend time in US as a visitor. Remember that to keep prov health care (you are on disability after all) you need to spend sufficient time in Canada AND maintain a residence there, both of which would preclude you becoming a US tax resident.

figs1980 · Post by **figs1980** » Thu May 31, 2012 12:17 pm

Thank you for your help, I will be moving there (U.S) and be resident as I will be getting married. My wife has a insurance, I will be covered under her plan. Would I be considered a non-resident? I will have ties to Canada. For tax purposes will I be canadian resident. Do I file in Canad? If so, I do not have to fill taxes in the U.S as iam not able to work thus the reason i am on disability. I family, friends, canadian accounts, driver licence, to meet the residency. Anyways, i am really confused. So, here is the scenario, If I leave in December, what do i need to do. Do i file as a resident? or Do i do an exit tax. I will not be cutting ties with Canada as I do not expect to be working in the US. So, i am not worried about the double taxation. I believe that is why most ppl sever ties with Canada.

Thanks

figs1980 · Post by **figs1980** » Thu May 31, 2012 12:22 pm

Do i really need to file taxes in USA if I don't work, and do not wish to ever become a US Citizen? someone told me why am i filling US tax if i am a Canadian Citizen and on Disability CPP and not working. (I will be married though, how would it affect)

nelsona · Post by **nelsona** » Thu May 31, 2012 1:29 pm

You will be living in US with your spouse, so you will WITHOUT choice be considered US resident for tax purposes, and thus Cdn non-resident for tax purposes, by CRA forcing rules. That will mean reporting in US, simply because of the number of days you spend in US as well.

When you move to US, you don't have to cut ties to be considered US resident.

Don't try to play both sides, it will only mess you up.

Your wife's insurance will cover you (although she would need to look into this now).
You will have exit tax, and then that will be it. Embrace the change.

figs1980 · Post by **figs1980** » Thu May 31, 2012 1:44 pm

Hi Nelsona,

Thank you very much. I really appreciate your help. I am not trying to play both sides. I am just simply looking of help. You have been very helpful....what you mean was if I live in the US, it doesnt mean i am not a Canadian resident right? After my exit tax, ,which will be in december....do I report my cpp in US for this year since i have not been there? or it will be next year? Thanks

nelsona · Post by **nelsona** » Thu May 31, 2012 2:20 pm

Your transition year will be special and will depend on the date you move, so no need to get specific at this point. After you move, your CPP is no longer taxable in canada. That is all you need to know for now.

Your exit tax will involve your investments, so think about what you want to do with those before moving.