How Are CPP and OAS Taxed if I Live in the US?

If you’re a US tax resident and no longer a Canadian resident, the Canada US treaty makes your CPP and OAS taxable only in the US. Canada has no right to tax either one, so the correct Canadian withholding is zero. The US then treats them as if they were US Social Security, so at most 85% of the total lands in your US income. And the OAS clawback doesn’t reach you, because it only bites where the non-resident tax on Canadian pensions is 25% or more, and the treaty holds that rate well under the line. Residency is the thing to settle first, so check whether you’re still a Canadian tax resident.

Does Canada tax my CPP and OAS if I live in the US?

No. If you’re a US tax resident and no longer a Canadian resident, the treaty makes your CPP and OAS taxable only in the US. That’s Article XVIII(5), as amended by the 1997 protocol, which hands a social security benefit to the country the recipient lives in. Canada’s own default is harsher: a flat 25% withholding on a pension paid to a non-resident under section 212(1)(h) of the Income Tax Act. The treaty overrides that to nil, so no Canadian tax is due, provided Service Canada has your US residency on file.

A social security benefit “paid to a resident of the other Contracting State shall be taxable only in that other State,” and the condition that applies to you follows on: “a benefit under the social security legislation in Canada paid to a resident of the United States shall be taxable in the United States as though it were a benefit under the Social Security Act, except that a type of benefit that is not subject to Canadian tax when paid to residents of Canada shall be exempt from United States tax.” (Canada US Tax Convention, Article XVIII(5))

Does the US tax my CPP and OAS, and how much of it?

Yes, and it taxes them as if they were US Social Security. Under the treaty the IRS runs a Canadian benefit through the same Social Security worksheet as a domestic one, which is what caps the damage: no more than 85% of the benefit is includible in your US gross income under IRC section 86, which sets the ceiling at “85 percent of the social security benefits received during the taxable year.” The rest isn’t included in your US income, and Canada has no claim on it.

“social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States … include them on line 1 of Worksheet 1” (IRS Publication 915)

Does the OAS recovery tax (the “clawback”) apply if I live in the US?

No, because the recovery tax has two conditions and both must be true at once: your annual net world income is over $93,454 (2025, in Canadian dollars), and you live in a country where the non-resident tax on Canadian pensions is 25% or more. A US resident can clear the income line and still owe nothing, because the second fails: the treaty holds that rate below 25%, capping periodic pensions at 15% under Article XVIII(2)(a) and putting CPP and OAS at nil under XVIII(5). Failing one condition keeps the clawback off you.

The recovery tax applies where “your annual net world income is more than $93,454 (for 2025, in Canadian dollars), and you live in a country where the non-resident tax on Canadian pensions is 25% or more” (Service Canada, Old Age Security pension recovery tax).

The same page draws the paperwork conclusion: “If you live in a country where the non-resident tax on Canadian pensions is lower than 25%, you do not need to file an Old Age Security Return of Income form.” So even if your income clears the $93,454 line, the OAS Return of Income falls away. This is the piece most write-ups get wrong. They describe a blanket exemption for non-residents, when the exemption actually rides on your country’s treaty rate sitting under 25%, which for a US resident it does.

Do I still receive CPP and OAS while living in the US?

They run on different tests. CPP eligibility turns on your age and your contribution history: you qualify at 60 with at least one valid contribution to the plan, and that test says nothing about where you live. OAS is the stricter one once you’re abroad. To collect it outside Canada you need at least 20 years of Canadian residence after age 18, against the 10 years that qualify you while you’re living in Canada. Clear 20 and OAS follows you across the border; fall short and it can stop after you leave.

CPP: you qualify once you “be at least 60 years old” and “have made at least one valid contribution to the CPP” (Service Canada, CPP retirement pension eligibility). OAS: the 20 year residence test for payment outside Canada, against 10 years inside it (Service Canada, Old Age Security eligibility).

That’s separate from the Canada US Totalization Agreement, which decides which country you pay social security into while you’re working, and says nothing about how the benefits get taxed later.

How do I report CPP and OAS on my US tax return?

You report them on line 1 of Worksheet 1, the Social Security worksheet, the same place US Social Security goes (IRS Publication 915). The worksheet then decides how much of the combined total is includible, capped at 85%, and that figure lands in your US gross income. Your CPP and OAS don’t go on a Canadian return, and no OAS Return of Income is due. Other Canadian-source income can still create a Canadian filing obligation.

For a US resident	CPP	OAS
Who may tax it	US only, under Article XVIII(5)	US only, under Article XVIII(5)
Canada’s tax / withholding	Nil under the treaty (the 25% default applies until your residency is on file)	Nil under the treaty (the 25% default applies until your residency is on file)
US inclusion	Up to 85% includible (IRC 86)	Up to 85% includible (IRC 86)
OAS recovery tax (clawback)	Not applicable	Does not apply: the treaty rate stays under the 25% trigger
Eligibility once you’re abroad	Age 60 plus one valid contribution; the test says nothing about residence	20 years of Canadian residence after age 18
Where it’s reported	US Social Security worksheet, Worksheet 1 line 1	US Social Security worksheet, Worksheet 1 line 1

This is where government pensions part ways with your private accounts. The rules for private RRSP and RRIF withdrawals, which the treaty handles under a different article don’t map onto CPP and OAS. If you’re still sorting the accounts side, start with what happens to your RRSP and TFSA when you move to the US.

What should I do next?

Pull two numbers before you assume anything. First, your years of Canadian residence after age 18, since the 20 year test decides whether OAS follows you abroad. Second, your expected net world income, which changes nothing about the clawback for a US resident but sets the contrast with a Canadian-resident peer. Then confirm Service Canada and the CRA have your US residency on file, so the nil treaty rate gets applied from the first payment.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.