What you need to do for the CPP enhancement

This discussion will focus on the how the CRA can provide you with clear and easy information about the CPP enhancement. We will use the information gathered through this consultation to inform the direction of future communications and outreach products and to allow the CRA to more efficiently reach self-employed individuals. Discussions that are considered off topic will not be posted as per our Terms of Use.

The information below explains what you need to do as someone who is self-employed for the CPP enhancement when it comes time to do your T1 income tax and benefit return in 2020.

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Self-employed

  • Send your CPP contributions when your T1 income tax and benefit return
  • Your contributions are based on net business income
  • When you do your taxes, seperate your CPP contributions into two parts: CPP base contributions and the CPP enhanced contributions. The base contribution is the amount that is calculated at a rate of 9.9% (which you currently contribute in 2018), and the enhanced portion is any amount above that. Currently, you can claim a 15% non-refundable tax credit on 4.95% of the base CPP contributions and claim  a tax deduction on the other 4.95%. You will continue to do this after the enhancement. You will also claim a tax deduction on the enhanced portion of your contributions.
  • Electronic filers – If you file your return electronically using commercial tax software that is certified for NETFILE, or a tax preparer completes and files your return using EFILE, the tax software will perform all of the necessary calculations. It will automatically separate and apply the base and enhanced contributions for you.
  • Paper filers – Schedule 8, CPP Contributions on Self-Employment and Other Earnings, will break down your base and enhanced amounts. A new line (Line 223) will be added to your T1 return where you will enter the enhanced amount of your contributions from Schedule 8. The CPP base amount will be entered on line 308, as in the past.

Comments

Patrick's picture
May 30, 2019 - 08:52

its very clear

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Franklin's picture
Jun 3, 2019 - 19:02

This should all just be done with income tax

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PsychBiz's picture
PsychBiz
Jun 4, 2019 - 18:42

clear and easy with electronic filing.

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