How To Ensure Rental Income Within Your Corporation is Active Business Income
How To Ensure Rental Income Within Your Corporation is Active Business Income May 5, 2023 Tax Question: How do you ensure your rental income within
May 5, 2023
Tax Question:
When and how can you stop contributing to Canada Pension Plan (CPP)?
Facts:
CPP provides contributors with partial replacement of earnings (pension) during retirement. If you have contributed to CPP, you are eligible to begin receiving CPP after you turn 60. If you are earning employment income, you must continue to contribute to CPP until the age of 70 unless you file an election to stop contributing to CPP.
To file an election to stop contributing to CPP you must meet the following criteria:
If you meet these criteria, you can fill out a CPT30 form to elect to stop contributing to CPP. You must file the form with your employer and send a copy to Canada Revenue Agency (CRA). You can stop contributing to CPP the first day of the month after the date you give this form to your employer and send a copy to CRA. Your election is effective until you revoke it. It is common for a company to receive a PIER report (payroll desk audit) on the T4 for the calendar year in which the election was made. CRA will want to confirm that the correct CPP contributions were made prior to the election being in effect. You can also file a CPT30 to elect to revoke your previous election and restart contributing to CPP. However, you can only file a CPT30 form once in a calendar year. For example, if you turn 65 in January and file the election to stop contributing to CPP and then later change your mind, you will need to wait until the next calendar year to file a new CPT30 form to revoke your election and begin contributing to CPP again.
If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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