Taxation of CPP and SS as USC Resident of Canada

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stewak2
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Taxation of CPP and SS as USC Resident of Canada

Post by stewak2 » Wed May 01, 2019 3:24 pm

I am collecting CPP and will be collecting US SS, USC dual citizen resident of Canada.
My understanding is I am only taxed in Canada on *both* the CPP and US SS, and only 85% of the US SS is taxable in Canada.
( I am still commuting to work in US and have US-source employment income ).
Correct?
My non-USC, Canadian, spouse will being collecting half of my US SS when she reaches full SS retirement age.
Does same taxation rule apply? She will be taxed only in Canada, on 85% of SS amount?

nelsona
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by nelsona » Wed May 01, 2019 3:49 pm

Correct.
The entire amount will be included in income, and then 15% of the SS is deducted on line 256.
btw, CRA considers SS payments (the taxable portion) as "splittable" pensions.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

stewak2
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by stewak2 » Thu May 02, 2019 11:45 am

Thanks.
For OAS clawback purposes, is it 85% of US SS or actual amount?

nelsona
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by nelsona » Thu May 02, 2019 12:18 pm

The entire SS is considered when determining OAS clawback, since the deduction is past the income determination line.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

stewak2
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by stewak2 » Thu May 02, 2019 2:07 pm

Thank you. At least I don't have to change my spreadsheet. :-)

GAD53
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by GAD53 » Sun Jul 21, 2019 1:22 am

As a resident of Canada you file with CRA. But, as a US citizen don't you file to the IRS too? regardless of your residency? I would think you do, and is any tax owing on the CPP and US SS income to the IRS?

nelsona
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by nelsona » Mon Jul 22, 2019 8:08 pm

The treaty specifies that SS (and CPP/OAS) received by US citizens is not taxable in US, so they would file accordingly.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

GAD53
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by GAD53 » Tue Jul 23, 2019 12:59 am

I guess the residency (US vs Canada) might make for a different situation, Y/N? (forgive my ignorance). The US Social Security website has a paragraph on "A CPP/QPP pension may affect your benefit". It goes on to say that-

"If you qualify for Social Security benefits from the United States based only on U.S. credits and a CPP/QPP benefit from Canada, the amount of your U.S. benefit will be reduced."

So I have 37 years of CPP contributions (getting confirmation), am living/working (not self employed) in the US -permanent resident status- due to fulfill my 40 credits in August 2020. I qualify to become a US citizen in June 2020. Wonder if it would be best to get my USC. If I don't, time spent in Canada needs to be carefully managed or I could lose my residency (Green Card) status and SS benefits. Would the formula of total CPP/SS benefits differ if I was a resident of Canada versus a resident of the US? Is there a way to determine how much my CPP benefit will reduce my SS?

Thanks in advance.

nelsona
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Re: Taxation of CPP and SS as USC Resident of Canada

Post by nelsona » Tue Jul 23, 2019 8:57 am

Residency or citizenship does not impact eligibility for these programs. Residency affects taxation only.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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