Changes to the Canada Pension Plan
Are you aware of the changes to the Canada Pension Plan (CPP) taking effect in January 2012?
The changes affect two age groups: 60 to 65 and 65 to 70 year olds.
60 to 65 years old
Employees and self-employed Individuals in this age category, who are receiving CPP benefits, must continue to contribute to the CPP.
65 to 70 years old
Employees and self-employed individuals who are at least 65 and under 70 years of age will be required to pay into the CPP unless an election is filed.
For employees, filing the election must occur in the month prior to ceasing the contributions. This means that if your client is an employee, qualifies to elect and chooses to no longer contribute to the CPP as soon as possible, their election must be filed by December 31, 2011. The election form is called Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election.
Clients who only have self-employed income will elect when filing their 2012 personal income tax return, which can be filed up until June 15, 2013.
Eligibility to stop paying CPP contributions is based on whether an individual:
·is at least 65 years old but under 70; and
·is receiving a CPP or QPP retirement pension; and
·is employed or self-employed.
Further details on CPP changes can be found here.
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