Canada Pension Plan (CPP) contributions for CPP working beneficiaries

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Canada Pension Plan (CPP) contributions for CPP working beneficiaries

You are a CPP working beneficiary if you meet all of the following conditions:

  • You are 60 to 70 years of age.
  • You are receiving a CPP or Quebec Pension Plan (QPP) retirement benefit
  • You have employment and/or self-employment income.

Do you have to contribute to the CPP?

As a CPP working beneficiary, you have to pay CPP contributions, unless you are in one of the following situations:

  • You are an employee working in Quebec.
  • Your employment income is not subject to the CPP.
  • You are self-employed and a resident of Quebec.
  • You are at least 65 years of age, but under 70, and have elected to stop paying CPP contributions.

How do you stop contributing to the CPP?

As a CPP working beneficiary, you have to pay CPP contributions. If you are at least 65 years of age, but under 70, you can elect to stop paying CPP contributions.

The method to stop is different if you are an employee, only self-employed, or if you are both an employee and self-employed.

Employee

If you are an employee, you can elect to stop contributing to the CPP by completing Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. Give a copy of Form CPT30 to all your employers, and send the original to the Canada Revenue Agency.

The election takes effect on the first day of the month following the date you give a copy of the completed Form CPT30 to your employer. For example, if you give Form CPT30 to your employer in June 2013, the election will take effect on July 1, 2013.

Notes: You cannot elect to stop contributing to the CPP until you are at least 65 years of age. The election stays in effect until you turn 70 years of age or until you revoke the election.

Only self-employed

If you are only self-employed (or if you have self-employment income and your only employment income is earned in Quebec), do not use Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, to stop contributing to the CPP.

Instead, complete the applicable section of Schedule 8, CPP Contributions on Self-Employment and Other Earnings, and file it with your Income Tax and Benefit Return. To be valid, an election that begins in 2012 must be filed on or before June 15, 2014.

You cannot elect to stop contributing to the CPP until you are at least 65 years of age. The earliest month an election can take effect is the month you turn 65. For example, if you turn 65 in July 2013, the earliest month an election can take effect is July 2013.

If you start receiving employment income (other than employment income earned in Quebec) in a future year, you will have to complete Form CPT30 in that year for your election to remain valid.

Note: If your situation does not change, the election stays in effect until you turn 70 years of age or until you revoke the election.

Individuals receiving both employment and self-employment income

If you have both self-employment and employment income (other than employment income earned in Quebec), you can elect to stop contributing to the CPP by completing Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. Give a copy of Form CPT30 to all your employers, and send the original to the Canada Revenue Agency.

The election takes effect on the first day of the month following the date you give a copy of the completed Form CPT30 to your employer. This date applies to both your employment and self-employment income. For example, if you give Form CPT30 to your employer on June 22, 2013, the election will take effect on July 1, 2013.

Notes: You cannot elect to stop contributing to the CPP until you are at least 65 years of age.
The election stays in effect until you turn 70 years of age or until you revoke the election.

How do you start contributing to the CPP again?

If you elected to stop paying CPP contributions in a previous year and you want to start contributing to the CPP again, you need to revoke your election.

You cannot revoke an election in the same calendar year that you elected to stop contributing to the CPP. For example, if you elected to stop contributing to the CPP in 2012, you cannot revoke this election before 2013.

How to revoke your election to stop paying CPP contributions?

Employment income (other than employment income earned in Quebec)

If you have employment income (other than employment income earned in Quebec), complete Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. Give a copy of Form CPT30 to all your employers, and send the original to the Canada Revenue Agency.

Individuals receiving both employment and self-employment income

Complete Form CPT30 if you have both self-employment and employment income (other than employment income earned in Quebec). Give a copy of Form CPT30 to all your employers, and send the original to the Canada Revenue Agency.

Only self-employed

If you are only self-employed (or if you have self-employment income and your only employment income is from Quebec), complete the applicable section of Schedule 8, CPP Contributions on Self-Employment and Other Earnings, and file it with your Income Tax and Benefit Return. This will only be available starting with the 2013 tax year.

Source: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/cpp-rpc/cpp-menu-eng.html

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Author: AllOntario Team

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