# CPP - Question



## hfp75 (Mar 15, 2018)

I am 43 (44 this year later) and am a ways from drawing my CPP. I was the treasurer of a local union (4 Yrs) and got a $1,000 honorarium. For that $1,000 I got a T4A, when putting that into TurboTax it brought up a form about being self employed. I filled it in with some basic information and off I went.

I noticed that when I look at my CPP years - it shows a * by the 4 years that I had to submit those T4As and it says that I was self employed ? Of my income only $1,000 was due to that volunteer position that generated the self employment paperwork for the tax return. 

In the end, does that change my benefit for those years ? Why does being self employed (the *) even matter ?


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## Longtimeago (Aug 8, 2018)

You should phone and speak to someone at CPP. I never understand why people post questions when they can just pick up a phone and ask the 'horse's mouth.'


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## OptsyEagle (Nov 29, 2009)

Self employed matters because with employees, 1/2 of the CPP contributions is paid by the employee and the other 1/2 is paid by the employer. With self-employed, the self-employed worker pays both parts. So in effect, a self-employed person pays twice as much to CPP then an employee pays.

Not sure why it matters after the contributions are made but perhaps they just want to highlight the times you did not have an employer to help out or at least did not have an employer to help out entirely for that year.


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## nortel'd (Mar 20, 2012)

hfp75 said:


> In the end, does that change my benefit for those years ? Why does being self employed (the *) even matter ?


I am not sure what that * means. My CPP Earnings and Contributions statement shows an “S” for the years my self employed income contributed to my CPP pensionable earnings.

If you have an online Service Canada Account check the “Legend for Notes” located at the bottom of your CPP Earnings and Contributions statement.

It might be worth your while to also check what Service Canada has recorded as earnings and contributions against your employer’s T4 for those 4 years. 

If during those four years you did not earn the maximum annual pensionable earnings (YMPE), the $1000 would become part of your earnings. Your online CPP earnings statement should be $1000 more than your T4’s Box 26. 

Since the $1000 was self employed income, you would have been required to pay an additional $99.00 in CPP contributions. Your online CPP contributions should be $99.00 more than your T4’s Box 16.

If the figures are correct then I would sit back and relax.

You are probably at work from 8:00 am to 5:00 pm Monday to Friday. Good luck calling CPP for help during your coffee/lunch breaks. I am retired and tried off and on for two days before I was able to get through. 

FWIW, when you start collecting CPP at age 65, those four $1000 payments are worth $2.00 per month to your CPP indexed pension.


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## fireseeker (Jul 24, 2017)

hfp75, you may want to post in this thread:
https://www.canadianmoneyforum.com/showthread.php/15085-I-m-a-CPP-expert-Any-questions/page32

Dogger is generous with his knowledge.


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## OhGreatGuru (May 24, 2009)

nortel'd said:


> ...
> 
> Since the $1000 was self employed income, you would have been required to pay an additional $99.00 in CPP contributions. Your online CPP contributions should be $99.00 more than your T4’s Box 16. ...
> ...
> FWIW, when you start collecting CPP at age 65, those four $1000 payments are worth $2.00 per month to your CPP indexed pension.


Only if he actually paid CPP contributions on it, via his income tax return. He would have to back check the details of his return(s) to see if Turbotax did that. In any case it's not at all clear to me why Turbotax would have decided it was "self-employment Income" instead of "Other Income".


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## nortel'd (Mar 20, 2012)

hfp75 said:


> I am 43 (44 this year later) and am a ways from drawing my CPP. I was the treasurer of a local union (4 Yrs) and got a $1,000 honorarium. For that $1,000 I got a T4A, when putting that into TurboTax it brought up a form about being self employed. I filled it in with some basic information and off I went.
> 
> I noticed that when I look at my CPP years - it shows a * by the 4 years that I had to submit those T4As and it says that I was self employed ? Of my income only $1,000 was due to that volunteer position that generated the self employment paperwork for the tax return.
> 
> In the end, does that change my benefit for those years ? Why does being self employed (the *) even matter ?


PS
I reread your post and I am not sure if you received a total of $1000 for 4 years or $1000 a year for 4 years.

FWIW, My calculations are based on the assumption your union offered you $1000 a year for each year you were their treasurer.


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## nortel'd (Mar 20, 2012)

OhGreatGuru said:


> Only if he actually paid CPP contributions on it, via his income tax return. He would have to back check the details of his return(s) to see if Turbotax did that. In any case it's not at all clear to me why Turbotax would have decided it was "self-employment Income" instead of "Other Income".


I don't use tax software so I am not positive, but, I think Turbotax will automatically treat values in Box 20 of a T4A as self-employed commissions and report them on line 139 of the T1 general.

Added later

OOPS:stupid: ..... hfp75 received an honorarium (fee for services) payment. These are reported in Box 48 of a T4A which one reports as business income (line 135) or professional income (line 137).  However, in 2012, the fees for services box 048 reporting became optional as CRA performed a review to clarify the types of fees for services that should be reported. 
Maybe the * means the income reported has past the test. :biggrin:


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## Dogger1953 (Dec 14, 2012)

hfp75 said:


> I am 43 (44 this year later) and am a ways from drawing my CPP. I was the treasurer of a local union (4 Yrs) and got a $1,000 honorarium. For that $1,000 I got a T4A, when putting that into TurboTax it brought up a form about being self employed. I filled it in with some basic information and off I went.
> 
> I noticed that when I look at my CPP years - it shows a * by the 4 years that I had to submit those T4As and it says that I was self employed ? Of my income only $1,000 was due to that volunteer position that generated the self employment paperwork for the tax return.
> 
> In the end, does that change my benefit for those years ? Why does being self employed (the *) even matter ?


As other have speculated, the "S" means that at least $0.01 of your contribution for that year was based on self-employed earnings. The only real purpose is if you're trying to balance the contribution costs against the total pensionable earnings for that year involves at least some self-employed contributions, because they're only worth half of what employee contributions are worth Because the employer made a matching contribution).


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## dubmac (Jan 9, 2011)

I saw this today in the news regarding the death of a spouse, and the impact on the drop of CPP on the surviving spouse. Put a bit of a shiver down my spine. Worth reading as one plans the "black swan events" that can impact the retirement income of surviving spouses.


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## AltaRed (Jun 8, 2009)

I am surprised that everyone does not already know that. CPP and OAS are individually based. The fact CPP has a survivor's benefit in some cases is a compassionate bonus. So is the death benefit.


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