CPP for non-residents of Canada: How to apply, report pension income and more

Who can apply for CPP

You can apply for a Canada Pension Plan (CPP) retirement pension as a non-resident of Canada. Unlike some other government benefits, residency does not have an impact on entitlement. You paid CPP contributions, along with your employers, over the years. Service Canada keeps track of these contributions from the time you turn 18 years old.

You can start your CPP as early as age 60 or as late as age 70. The longer you wait, the higher your payments. There are strategies to consider for timing your CPP start date, but for now, we will focus on your questions, Maryann.

The application process is the same whether you are a resident or not. You can apply using Service Canada’s online My Service Canada Account (MSCA) portal, or by completing and submitting by mail an application form (Form ISP-1000, Application for a Canada Pension Plan).

The government suggests to apply six months before you want your pension to start, though it can be paid to you retroactively for up to 12 months.

As a non-resident, it can be paid into a foreign bank account in a foreign currency.

You will receive an NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada tax slip early in the year that reports income—and tax withheld, if applicable—for your CPP for the previous year. This income may be taxable in your country of residence.

For U.S. residents, only 85% of CPP is taxable. The income is reported on a 1040 tax return filed with the Internal Revenue Service.

What’s the maximum CPP pension?

You typically need 39 years of maximum contributions to qualify for the maximum CPP retirement pension, which is currently $1,455 per month, at age 65.

If you graduated in spring 1987 and were working full-time by 1988, that means you have 37 years of potential contributions through the end of 2024, Maryann. You mentioned you have been in the U.S. for three years though, so that means you’re likely a little shy of getting the maximum CPP.

You could request a CPP Statement of Contributions from Service Canada to confirm.

CPP child rearing provision

One thing that could help your application and that will not be reflected online is the child rearing provision. This allows an applicant to drop years from their CPP calculation when they had children under the age of seven and were the primary caregiver. Caring for young children may have led to a reduction in CPP contributions, and therefore, a reduction in pension entitlement.

This dropout provision can enhance your CPP entitlement and may apply to you, Maryann.

U.S. Social Security for Canadians

Social Security is the U.S. equivalent to the CPP. Applicants generally need at least 40 of quarterly credits or 10 years of covered work to qualify. However, Maryann, you might still qualify even though you probably will not have 10 years of contributions.

The U.S.-Canadian Social Security Agreement allows Canadians to qualify for Social Security with just six work credits or a year and a half of contributions. This involves using Canadian CPP credits to reach the 10-year threshold.

As a result, Maryann, you may also qualify for a Social Security pension, albeit a small one, for a few years of work and your contributions in the U.S.

Interestingly, the Windfall Elimination Provision (WEP) of the Social Security has historically caused a pensioner with non-covered pensions, including CPP, to have a reduction in their Social Security. But the introduction of the Social Security Fairness Act by President Biden means that the WEP no longer applies after December 2023.

OAS for non-residents

Non-resident applicants for Old Age Security (OAS) must have at least 20 years of residency in Canada after age 18 to qualify. You need 40 years of residency to qualify for the maximum OAS, which is $728 per month for a 65-year-old in the first quarter of 2025.

Withholding tax may apply for non-residents, depending on their country of residence. A U.S. resident is not subject to withholding tax, but OAS is taxable in the U.S.

Depending upon their country of residence, non-residents may have to complete Form T1136, Old Age Security Return of Income (OASRI) annually. As a U.S. resident, Maryann, you will not have to complete the form. If your income exceeds the OAS clawback threshold—$93,464 for 2025—you may see a reduction in your OAS. A U.S. resident is not subject to this high-income clawback.

Pension income planning for non-residents of Canada

To wrap up, Maryann, you can apply to begin your CPP while a non-resident of Canada, living in the U.S., as long as you are at least 60 years old. You will not be subject to withholding tax, but the income will be taxable in the U.S.

You may also be entitled to an increase in your CPP under the child rearing provisions, and your CPP should help you qualify for Social Security. Recent Social Security changes also mean your CPP will not lead to a reduction in your Social Security. You can also apply to begin OAS if you are at least 65.

If you are in good health, have a conservative risk tolerance, or have little other pension income, these are some things that should cause you to consider deferring your CPP and OAS start dates to as late as age 70, especially if you do not need the income in the interim.

Read more about pensions:

• OAS payment dates, and more to know about Old Age Security
• CPP payment dates, and more to know about the Canada Pension Plan
• How much money should I have saved by age 40?
• How to plan for retirement when you have no pension

About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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