Recent Changes to Canada Pension Plan
Do You Need to File a CPT30 Election Form
On January 1, 2012 new rule changes came into place that will affect individuals and business owners who are 60 years of age and less then 70 years of age.
Under the old rules once you began to receive Canada Pension Plan (CPP) retirement pension, which could have occurred at an early age of 60 years, you and your employers were no longer required to contribute.
Now under the new rules an employee who works and continues to receive CPP retirement pension now has to continue to contribute to CPP if he or she is:
• 60 to 65 years of age
• 65 to 70 years of age unless they have filed an election form Form CPT30 to stop paying CPP contributions.
Employers are required to continue to deduct CPP for all employees until 70 years of age unless they have the CPT30 Form completed for those aged 65 to 70. For employers and small business owners, in the event that you do not continue to deduct CPP contributions Canada Revenue Agency can assess you with interest and penalties for non-remitting.
What the New rules Mean to you.
Additional Cost to Small Business Owners
For small business owners or self employed the maximum contribution for CPP based on a salary of $51,100 for 2013 is $2,356.20 for the employee and $2,356.20 for the employer which means that paying in will cost you an additional $4,712.40 per year unless you file the election form.
Filing the CPT30 Election Form
I have attached a copy of the CPT30 Form which must be provided to the employer(s) and also send in an original copy of the form to the following address:
Canada Revenue Agency, Winnipeg Tax Centre, Specialty Services Section, 66 Stapon Road,Winnipeg, Manitoba, R3C 3M2
What Happens Once You Elect to Stop
If you elect to stop contributing to CPP, the election will take place on the 1st day of the month following the date you give this form to your employer. Once the election is filed and if you decide before age 70 change your mind and to pay into CPP again you simply file the same type of form but select Revocation of an election and follow the same steps and you will contribute again from the 1st month following the date you give this form to your employer.