Certificate of Coverage for Americans Working in Canada

Allan Madan, CA
 Jul 3, 2015

Are you a U.S. citizen working in Canada? Is the thought of double taxation making you sweat? No need to worry, Allan Madan will take you through vital information pertaining to double taxation surrounding social security.

If you are a US citizen working in Canada, then you will find this blog very useful! Are you aware of the double taxation surrounding social security?  Wipe the sweat from your brow because this blog will focus on:

certificate of coverage1. What are Canadian Pension Plan Premiums?

2. When do Americans have to pay CPP in Canada

3. What is the purpose of the certificate of coverage?

Anyone who works in Canada and who is 18 years of age or older, must contribute to the CPP. The CPP is Canada’s Pension Plan System – similar to the Social Security System in the United States. Learn more about the Canadian Pension Plan System.

There is a different pension plan for workers in Quebec, called the Quebec Pension Plan (QPP). Usually, your employer will contribute ½ of the required contribution, and you will contribute the remaining half. These CPP contributions will determine if you and your family are eligible for CPP benefits, and the amount of those benefits.

The most common way for an American to pay CPP in Canada is if he/she both lived and worked in Canada. In the case that you live in the United States, you may still have to contribute to the CPP.

Canada has Social Security Agreements with many countries, one of them being the US. Under Article 5 of the Social Security Agreement between the US and Canada, you have to contribute to the social security system where you are working and governed by those labor laws.

If you do absolutely nothing, chances are you will be stuck paying social security taxes to both Canada and the U.S.  However, you will qualify for the Certificate of Coverage if your US employer sends you to work in Canada for 5 years or less. If you are a U.S. citizen working in Canada, learn more about the tax implications you may face and how to effectively deal with these implications. 

The election allows you to contribute to the Social Security of the country where your employer is making a contribution.

certificate of coverageWith today’s technology everything can be done online! This includes getting a certificate of coverage. You can apply online through the Social Security administration’s website. It is important that you contact your employer first, as most of the information will be provided by them.

The Certificate of Coverage must be presented to your U.S. employer, and your employer will provide that certificate to the Canadian and provincial authorities if asked for. It is best that you apply for this certificate before you begin traveling to Canada for work.

So Here’s the Tip:

Before you begin working in Canada, ask your employer to obtain a certificate of coverage for you and keep it with you in case you are asked to present it.


The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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Comments 2

  1. As a Canadian living in USA. I commute daily to work in Canada. Am I considered a Canadian citizen for tax purposes? Or can I use the foreign income exclusion on my us taxes

    1. Hi Greg,
      You are not a Canadian tax resident, because you return to your home in the US after work everyday. However, you still have to file a Canadian non-resident T1 return and pay Canadian income tax on your Canadian salary / wages.

      On your US return, you can claim a foreign tax credit for the Canadian taxes paid in order to avoid double taxation.


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