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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12452
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I had OAS and CPP directly deposited to a US account and paid

Customer Question

I had OAS and CPP directly deposited to a US account and paid US taxes. Do I still pay Canadian taxes as well?
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
Hi,
Not if you are a resident of the US.
Canadian Tax System (with the exception of registered plans) is based on residency and the US system is based on Citizenship and TAX residency (having either a green card or passing the substantial presence test)
For example, if you are a US citizen, you are taxed in income, regardless of where is was earned in the world.
In the Canadian system, (for someone living in the US) the only time you are subject to Canadian tax on pension distributions is when there is the automatic withholding from Registered plans.
OAS is an actual government plan (as opposed to a government REGISTERED plan, such as RRPs/RRSPs).
CPP is really a defined benefit pension plan, which is not part of government assets. Canadians and their employers make contributions into CPP through their pay.
Neither POS nor CCP is subject to an automatic tax withholding such as with RRSPs so there's no Canada tax as long as you are a US resident.
By the way, if there WERE any tax on ANY Canadian pension (such as IS the case with RRSPs) you would report and pay Canadian Tax and then take the Foreign Tax Credit after paying on your US return, so prevent double taxation.
But here, there's no need, as there is no forced withholding from Canada.
Let me know if you have questions...
lane