Monday, May 16, 2022

How To File For Canadian Social Security

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How Credits Get Counted

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You do not have to do anything to have your credits in one country counted by the other country. If we need to count your credits under the Canadian system to help you qualify for a U.S. benefit, we will get a copy of your Canadian record directly from Canada when you apply for benefits. If Canadian officials need to count your U.S. credits to help you qualify for a Canadian benefit, they will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Canadian benefit.

Although each country may count your credits in the other country, your credits are not actually transferred from one country to the other. They remain on your record in the country where you earned them and can also be used to qualify for benefits there.

What Is The Canada Pension Plan

The Canada Pension Plan is one of three levels of the Canadian retirement income system. It was established in 1966 to provide retirement, survivor, and disability benefits. Almost everyone who works in Canada, outside of Quebec, contributes to the CPP. A separate Quebec Pension Plan provides similar benefits to its residents.

In general, you must contribute to the CPP if:

  • You’re over age 18
  • As of 2021, you must earn more than 3,500 Canadian dollars a year

If you have an employer, you pay half of the required contribution, and your employer pays the rest. If you’re self-employed, you pay the whole contribution. You make contributions based on your earnings. For 2021, the contribution rate is 10.9% of the amount you earn between CA$3,500 and CA$61,600 .

With this cap in place, the 2021 maximum contribution for employers and employees is CA$3,166.45. If you’re self-employed, it’s CA$6,332.90.

The contributions go into a fund managed by the CPP Investment Board, which invests the assets “to maximize returns without undue risk of loss.”

Guidelines To The Application Process

Please read the guidelines to each application form before you fill out the application, as well as the general information about the pensions/benefits. Then you will better be able to assemble the necessary information for filling out the application and the necessary documentation to be enclosed with the application.

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Ubc Fpp Retirement Income Options

If you will be or are receiving income from one or more of the UBC FPP Retirement Income Options and reside outside of Canada, you must complete and submit a NR301 Declaration of eligibility for benefits under a tax treaty for a non-resident person form with your retirement income application or when you cease to be a resident of Canada.

How Can A Social Security Agreement Help Me Qualify For Benefits

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A social security agreement can help you qualify for benefits by allowing you to combine your periods of contribution or periods of residency in Canada with your periods of contribution or periods of residency in the other country to meet the minimum eligibility criteria. It can also reduce or eliminate restrictions based on citizenship or on payment of pensions abroad.

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Canadian Government Income Security Programs

As a non-resident of Canada, you may be entitled to apply for Canada Pension Plan payments and Old Age Security Pension payments.

Canada also has agreements with a number of other countries that offer comparable pension programs. These agreements allow for the co-ordination of two countries social security programs and make the benefits portable between the countries. For example, most social security programs require contributions during a minimum number of years. Under these agreements, periods of residence in Canada or contributions to the CPP may be used to satisfy the eligibility conditions of the other countrys social security system. For more information, visit Lived or living outside Canada Pension and benefits Overview on the Government of Canada website.

Note: If you are a non-resident of Canada, get Form NRTA1, Authorization for Non-Resident Tax Exemption for more information on transfers.

Make Sure You Qualify

To qualify for your Canada Pension Plan retirement pension, you must:

  • be at least 60 years old
  • have made at least one valid contribution to the CPP

Valid contributions can be either from work you did in Canada, or as the result of receiving credits from a former spouse or former common-law partner at the end of the relationship.

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Reporting Canadian Social Security Benefits

Go to federal taxes then wages and income and then explore on my own Scroll down the list of income items until you find Canadian Registered Pension Income. This category covers Canadian Registered Retirement Savings Plans and Registered Retired Income Funds . Follow the prompts and you should be in good shape. This category covers both contributions and distributions, and covers both beneficiaries and annuitants.

According to the IRS, special tax treatment applies to payments receive from the following Canadian retirement programs: Canada Pension Plan , Quebec Pension Plan , and Old Age Security . If the recipient is a resident of the United States, the benefits:

  • are taxable only in the United States,

  • are treated as U.S. social security benefits for U.S. tax purposes, and

  • are reported on Form 1040, U.S. Individual Income Tax Return on the line on which U.S. social security benefits would be reported.

    If the recipient is a U.S. citizen or lawful permanent resident who is a resident of Canada, the benefits are taxable only in Canada.

What Is Social Security

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Social Security is a federal benefits program in the U.S. that was founded in 1935. In 2022, employees and employers each pay 6.2% in taxes on the first $147,000 of income . If you’re self-employed, you pay the full 12.4%. For 2022, the maximum contribution for employers and employees is $9,144, or 6.2% of $147,000. If you’re self-employed, it’s $18,228. .

Most people must pay into Social Security, regardless of age. However, exemptions may be available to certain groups of taxpayers, including:

  • Qualifying religious groups
  • Students who work for the same school they attend
  • Foreign government employees

Social Security taxes go into the Old Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund. Although legally distinct, they’re collectively known as “the Social Security Trust Funds”or plain-old “Social Security” in common parlance.

All Social Security payroll taxes are put into the trust funds, and all of Social Security’s benefits and administrative costs are paid out of them. The trust funds are invested entirely in U.S. Treasury securities.

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Final Protocol To The Convention On Social Security Between Canada And The Swiss Confederation

At the time of signing the Convention on Social Security between Canada and the Swiss Confederation, the undersigned plenipotentiaries stated that they are in agreement on the following points:

  • Paragraph 1 of Article 4 shall not apply to the Swiss legal provisions on:
  • voluntary Old Age, Survivors and Disability Insurance of Swiss nationals residing abroad
  • Old Age, Survivors and Disability Insurance of Swiss nationals working abroad for an employer in Switzerland and being paid by that employer
  • welfare allowances granted to Swiss nationals residing abroad.
  • The provisions of the Convention shall not prevent the application of a provision of the legislation of Switzerland which would be more advantageous to persons with respect to benefits.
  • With respect to paragraph 1 of Article 6, the income a person receives from gainful employment in the territory of Canada shall not be taken into account in the calculation of contributions required under the legislation of Switzerland.
  • The spouse and children accompanying a detached person in Switzerland within the meaning of Article 7 shall be exempted from coverage under the legislation of Switzerland in so far as they are not pursuing gainful employment in Switzerland.
  • The spouse and children accompanying a detached person in Canada within the meaning of Article 7 shall remain insured under the legislation of Switzerland in so far as they are not pursuing gainful employment in Canada.
  • Lloyd AxworthyFor the Government of Canada

    Are There Any Circumstances Where The Oas And Cpp/qpp Pensions Do Not Affect The Rate Of New Zealand Superannuation And Veteran’s Pension

    There is no provision in New Zealand legislation that would allow the amount of OAS and CPP/QPP pensions to be disregarded when determining the amount of New Zealand Superannuation and Veteran’s Pension to be paid.

    However if you travel or move to a country that New Zealand does not have an agreement with you will be entitled to a proportional amount of New Zealand Superannuation/Veteran’s Pension based on the amount of time that you have lived in New Zealand. When paid this rate of New Zealand Superannuation/Veteran’s Pension you can keep your overseas pension.

    How much New Zealand Superannuation or Veteran’s Pension will I get paid?

    The amount paid depends on marital status and living arrangements. There are currently two basic rates which are generally referred to as: the married rate and the single sharing rate. These two rates are not subject to an income or asset test.

    Before 9 November 2020, a qualifying superannuitant could choose to receive an alternative married rate, which included payment for a spouse or partner who is under 65 years of age . This rate is subject to an income test. From 9 November 2020, this rate can no longer be applied for. Anyone already receiving this rate can continue to review it, as long as they remain eligible for this. This rate cannot be paid if you move to Canada or leave New Zealand permanently.

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    Effective Date Of Coverage Exemption

    The certificate of coverage you receive from one country will show the effective date of your exemption from paying Social Security taxes in the other country. Generally, this will be the date you began working in the other country.

    Certificates of coverage issued by either the Department of National Revenue in Ottawa or the Bureau des ententes de sécurité sociale in Montreal should be retained by the employer in the United States in case of an audit by the IRS. No copy should be sent to IRS unless specifically requested by IRS. However, a self-employed person must attach a of the certificate to his or her income tax return each year as proof of the U.S. exemption.

    Copies of certificates of coverage issued by the United States will be provided for both the employee and employer. It will be their responsibility to present the certificate to the Canadian or Quebec authorities when requested to do so. To avoid any difficulties, your employer should request a certificate as early as possible, preferably before your work in the other country begins.

    If you or your employer request a certificate of coverage, you should read the Privacy Act and Paperwork Reduction Act Statements below.

    How Do I Enter My Canada Pension Plan Or Old Age Security Benefits

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    Per IRS Publication 915:

    Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States.

    In other words, if you’re a U.S. resident, you’d enter your Canadian CPP and OAS benefits as though you’d received a Form SSA-1099 from the Social Security Administration.

    The U.S.-Canada tax treaty also applies to the Québec Pension Plan . Note that the agreement only addresses government-issued Social Security benefits, not money received from private Canadian pensions.

  • In TurboTax, open your return and search for SSA-1099, then select Jump to in the search results
  • On the Did you receive Social Security or Railroad Retirement benefits? screen, select Yes
  • Check the first box for Social Security benefits
  • Enter the total Canadian CPP and OAS payments you received during 2021 in Box 5
  • If you already have something in Box 5 from a previously-entered SSA-1099, add your CPP/OAS benefits to the amount already there
  • In the uncommon situation where taxes were withheld from your payments, enter the total withheld during 2021 in Box 6
  • Select Continue and follow any additional instructions
  • Sign into the TurboTax mobile app
  • Select Wages & Income and then Review/Edit or Pick up where you left off
  • Select Retirement Plans and Social Security, then Social Security
  • Select Continue and follow any additional instructions
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    Why Can’t I Receive My Oas And Cpp/qpp Pensions And The Full Amount Of New Zealand Superannuation Or Veteran’s Pension

    This is to ensure that the combined amount you receive from your New Zealand Superannuation or Veteran’s Pension and any overseas pension is equivalent to the amount you would receive if you only received New Zealand Superannuation or Veteran’s Pension.

    It takes 40 years to become entitled to the full amount of an OAS pension and to qualify for the maximum rate of CPP and QPP, generally a person must have paid the maximum level of contributions for about 85% of their working life from age 18 to the time that the pension begins to be paid. However, periods of low earnings where people are raising children under age seven and periods while in receipt of a CPP or QPP disability benefit do not adversely affect the amount of the CPP or QPP pension.

    In comparison it takes 10 years before a person becomes entitled to the full rate of New Zealand Superannuation or Veteran’s Pension. So if you were to receive a partial Canadian pension as well as the full amount of New Zealand Superannuation or Veteran’s Pension, you would receive more state retirement pension than those superannuitants who have lived all their lives in New Zealand and who have contributed to the funding of New Zealand Superannuation for a longer period of time through paying their taxes.

    Direct Benefits Comparison With The United States

    Table 4 considers the difference between Canada and the United States from the perspective of the poverty measures. We report U.S. figures for Pennsylvania, given that state’s “median” status , and we assume that the SSI recipient receives the average food stamp benefit . The first line of data in Table 4 shows that the Canadian basic income guarantee for the elderly substantially exceeds that provided in the United States. In the second line we report for the United States the OECD poverty standard of 50 percent of median adjusted income, expressed in terms of gross income before taxes but including cash transfers.13 Using the Canadian equivalence scale, the couple value is 1.4 times the single adult value. The Canadian LIM is taken from official sources and converted to U.S. dollars using the same purchasing power adjustment as that applied in Table 3. Real income is lower in Canada, and half the medianthe OECD relative poverty measureis about 3 percent lower. We also include, in line three, the official U.S. poverty measure, based on the cost in current prices of a yardstick outlay established in 1963. Having established these points of reference, data lines four and five report the maximum benefit in both countries as a percentage of the 50-percent-of-median standard and the U.S. poverty standard, that is, the numbers appearing in lines two and three.

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    How Cpp And Social Security Integrate

    by | Sep 24, 2018

    If youve worked in both the USA and Canada, you have likely contributed to both the USAs Social Security program and the Canada Pension Plan . How will CPP benefits impact your Social Security benefits? How will your US residency impact your CPP and Old Age Security benefits? Do these things even speak to each other?

    Luckily for you, in 1984 the US and Canada came to an agreement called the Totalization Agreement. This was created with the intention of protecting the benefits of people who have contributed to government pension plans on both sides of the 49th parallel.

    Contributions While Youre Working

    If your work is covered by the retirement benefits programs of both the US and Canada, this agreement allows you to contribute to just one of those programs. This is key, as prior to the agreement you would have contributed to both. This might come into play if youre a US citizen who has been sent by your US employer to work with a Canadian affiliate but note that this exception is in place for a period of only five years.

    If youre self-employed, you will contribute only to the pension plan of the country where you live.

    Eligibility for Retirement Benefits

    If you have contributed in both countries, you may be eligible for benefits in one or both countries. If you dont meet the basic requirements from one country, you may be able to qualify by applying your credits earned in another country.

    U.S. Social Security

    Canada Pension Plan

    What to do now?

    Leaving Your Funds Invested In The Plan

    Social Security Disability FAQ: Can I Work while applying for Disability?

    If you elect to leave your funds in the Plan, you will continue to have access to your FPP account online at If you have elected to receive paper copies of your annual Statements of Account, you will continue to receive them by mail to the address on record. Please ensure that your mailing address and contact information is kept up to date. No further action is required until you request a pension benefit payment.

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    Transfer My Funds To Other Registered Plans

    You may transfer your funds to a registered plan with a financial institution or employer in Canada. There are no reciprocal transfer provisions that permit tax-sheltered transfers between registered plans to other countries.

    If you wish to transfer your funds to a registered plan in Canada, contact your financial institution. Refer to Transfer to Other Registered Plans for additional information and required forms.

    Increase In Contribution Rate

    The contribution rate was 9.9 per cent prior to 2012. In accordance with the 2011-12 Budget of the Government of Quebec, the contribution rates were increased by 0.15 per cent per year for six years from 2012 to 2017. Consequently, the contribution rate increased to 10.8 per cent for 2017 and subsequent years.

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