CPP Changes - New Filing Deadline

Changes to the Canada Pension Plan scheduled for January 1, 2012 may come as a surprise for some semi-retired Canadians. Up until now, once you began receiving your CPP retirement pension, you were no longer required (or allowed) to contribute to the CPP. As of January 1, that's changing. By default, all employees (and self-employed taxpayers) who earn CPP contributory earning will be required to contribute to CPP even if they are already collecting a CPP retirement pension. For employees over age 65, there's a way to opt out, but the deadline for opting out is December 31, 2011. If you don't file Form CPT30 with your employer by the deadline you'll be paying CPP contributions on your earnings as on January 1.

For employees who are under age 65, the nasty surprise is you have to start contributing to CPP again on January 1, even if you're already collecting a retirement pension.  Employees who are over 70 continue to be exempt.  For employees ages 65 to 69, beginning January 1, 2012, payroll departments are required to withhold CPP contributions unless they have a completed Form CPT30 Election to stop contributing to the Canada Pension Plan, or revocation of a prior election on file.  The election will apply to the first month following the receipt of the completed form by the employer.  So, if you don't want to pay CPP in January, you must file the form by December 31.

For self-employed taxpayers, the requirement is not so urgent.  For self-employed taxpayers between age 65 and 69 to opt out of the additional CPP contributions, all that is required is to indicate on Schedule 8 for 2012 (filed with their 2012 tax return) which month they want to cease contributing.