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

By Yarik Yarosh, CPA ·July 24, 2026 ·12 min read

Written by Yarik Yarosh, CPA (US & Canada) July 24, 2026 · FL CPA license AC61704 · CPA Ontario

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 for a US resident the treaty rate is nil on CPP and OAS and 15% on a periodic pension payment. Residency is the thing to settle first, so check whether you’re still a Canadian tax resident.

✓Key takeaway

Two governments, one bill. Once you’re a US resident and no longer a Canadian one, Canada has no claim on your CPP and OAS, and the US picks them up as Social Security, capped at 85% includible. The clawback everyone braces for doesn’t trigger, because for a US resident the treaty rate is nil on CPP and OAS and 15% on a periodic pension payment, both under the 25% line that sets it off.

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), as replaced by Schedule V)

Section 212 never names CPP or OAS, so the 25% default reaches them one step back. The paragraph taxes “a payment of a superannuation or pension benefit”, and section 56(1)(a)(i) puts “the amount of any pension, supplement or spouse’s or common-law partner’s allowance under the Old Age Security Act” and “the amount of any benefit under the Canada Pension Plan” inside that term.

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 once you’re no longer a Canadian resident.

“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 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 who’s no longer a Canadian resident can clear the income line and still owe nothing, because the second fails: the treaty puts CPP and OAS at nil under Article XVIII(5) and caps a periodic pension payment at 15% under XVIII(2)(a). 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 it does for a US resident who’s no longer a Canadian resident: nil on CPP and OAS under Article XVIII(5), 15% on a periodic pension payment under XVIII(2)(a).

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 has an age test too, 65 wherever you live, and once you’re abroad it adds two more conditions. You have to have been a Canadian citizen or a legal resident on the day before you left, and you need at least 20 years of Canadian residence after age 18, against 10 years if you’re living in Canada. Miss either of those and OAS 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: “You must be 65 years or older to receive the Old Age Security (OAS) pension.” Living outside Canada, you must also “Have been a Canadian citizen or a legal resident of Canada on the day before you left Canada” and “Have resided in Canada for at least 20 years since the age of 18”; living in Canada, the same page asks for citizenship or legal residence “at the time we approve your OAS pension application” and “at least 10 years since the age of 18” (Service Canada, Old Age Security eligibility).

The Canada US Totalization Agreement sits on a different track again, and it does two jobs. It decides which country you pay social security into while you’re working, and it counts your US periods toward qualifying on the Canadian side. What it doesn’t do is say anything about how the benefits get taxed later.

“If you do not qualify for an Old Age Security pension based on your years of residence in Canada, Canada will consider your periods of contributions to the pension program of the United States after the age of 18 and after January 1, 1952 as periods of residence in Canada”, and “If you do not qualify for a Canada Pension Plan benefit, Canada will consider your periods of contribution to the pension program of the United States as periods of contribution to the Canada Pension Plan” (Service Canada, Canada US social security agreement).

That covers qualifying for the pension in the first place. It doesn’t reach the separate 20 year test for being paid outside Canada, so if your Canadian record is short and your US work history is long, put that question to Service Canada before you plan around either number.

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. Once you’re no longer a Canadian resident, 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 who’s no longer a Canadian 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: nil under XVIII(5) and 15% on a periodic pension under XVIII(2)(a), both under the 25% trigger
Eligibility once you’re abroad	Age 60 plus one valid contribution; the test says nothing about residence	Three conditions: age 65, citizen or legal resident of Canada on the day before you left, and 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. It’s also where the 15% ceiling stops. Article XVIII(2)(a) caps a “periodic pension payment” and nothing else, and the Article XVIII(4) annuity definition expressly excludes “a payment that is not a periodic payment”, so a lump sum out of a registered plan is outside both routes and takes the full 25%. If you’re still sorting the accounts side, start with what happens to your RRSP and TFSA when you move to the US.

Hypothetical example

Hypothetical, invented round numbers. The Canadian figures are Canadian dollars, the currency the $93,454 line uses; the US figures are their US dollar equivalent, converted on a real file at the annual average rate. Someone age 68 is a US tax resident, no longer a Canadian resident, and a Canadian citizen. They collect CPP of $9,000 and OAS of $8,000, and other income pushes their net world income to about $120,000.

Canada side: Article XVIII(5) makes both benefits taxable only in the US, so Canada’s tax on them is $0. Their $120,000 is well above the $93,454 income line, but the recovery tax still doesn’t apply, because the treaty rate for a US resident is nil on CPP and OAS and 15% on a periodic pension payment, both under 25%. No OAS Return of Income is due.

US side: the $17,000 combined is treated as US Social Security, so no more than 85% of it, $14,450, is includible in US gross income under IRC section 86. That leaves at least $2,550 outside their US income, and Canada has no claim on it.

Contrast: a Canadian resident with the same $120,000 would repay part of their OAS through the recovery tax. The US resident owes Canada nothing.

Illustrative numbers only, not a real client and not advice for your facts.

Practitioner note

Once you’re a US resident and no longer a Canadian one, the treaty rate is nil, but I regularly see Service Canada withholding 25% anyway, because they still have a Canadian address on file or never got the residency updated. You can get that money back, but it runs on a clock: ITA 227(6) pays the refund only on a written application made no later than two years after the end of the calendar year the amount was paid. Worth asking about the section 217 election too: a separate route to relief on an over-withheld pension, on a tighter clock of six months after the year end. Tell Service Canada and the CRA you’re a US resident before the first payment posts, not after, and keep the confirmation. Unwinding a year of wrong withholding is far more work than setting it up right once. The full mechanics of that election, including the tax-payable floor and the flip point, are in should I take the flat 25% or file a section 217 election.

What should I do next?

Pull two numbers and one status first. Your years of Canadian residence after age 18, since OAS abroad needs at least 20 of them on top of being 65. Your expected net world income, which changes nothing about the clawback once you’re no longer a Canadian resident but sets the contrast with a Canadian-resident peer. And the status: whether you were a Canadian citizen or a legal resident on the day before you left, the third limb of that OAS test. Then confirm Service Canada and the CRA have your US residency on file, so the nil treaty rate applies from the first payment.

Paying into CPP versus US self-employment tax, which decides where the contributions go
The totalization agreement: combining credits and the WEP repeal, which determines whether you qualify for both CPP and Social Security benefits in the first place
What the 2025 Act changed for cross-border filers, including the new senior deduction (which does not change how Social Security is taxed, despite the headlines)
Canadian employer pension (DB/DC) received in the US, how a workplace pension is taxed differently from CPP and OAS
Streamlined filing for retirees with CPP, OAS, and RRIF, if you never filed US returns on your Canadian pension income and need the catch-up package
Employment Insurance (EI) cross-border, how EI benefits are taxed when you live in the US
OAS clawback for non-residents, the broader mechanics of Part XIII withholding and the section 217 election
Disability benefits cross-border, CPP-D follows the same treaty treatment as CPP retirement

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Cite this page

Yarik Yarosh, CPA. "How Are CPP and OAS Taxed if I Live in the US?." Blue Cloud CPA, July 24, 2026. https://bluecloudcpa.com/guides/how-are-cpp-and-oas-taxed-if-i-live-in-the-us

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