Pension & Social Security Benefits

https://www.ssa.gov/pubs/EN-05-10045.pdf

For example, for a worker who turns 62 in 2017, the first $885 of average

monthly earnings is multiplied by 90 percent; earnings between $885 and $5,336 by 32 percent; and the balance by 15 percent. The sum of the three amounts equals the PIA which is then decreased or increased depending on whether the worker starts benefits before or after full retirement age (FRA). This formula produces the monthly payment amount.

For example, workers age 62 in 2017, with average earnings of $3,000 per month could receive a benefit at FRA of $1,473 (49 percent) of their pre-retirement earnings increased by applicable cost of living adjustments (COLAs). For a worker with average earnings of $8,000 per month, the benefit starting at FRA could be $2,620 (32 percent) plus COLAs. However, if either of these workers start benefits earlier, we’ll reduce their monthly benefit.

https://cardinalpointwealth.com/2014/05/02/are-cross-border-social-security-benefits-taxable/

- U.S. Social Security Benefits for Americans Living in Canada

- U.S. Social Security benefits. These benefits will be subject to tax only in Canada, meaning Robert will be taxed the same way as other Canadian residents even though he’s a U.S. citizen. Here’s the math. In his Canadian taxable income, Robert will include 85% of his Social Security benefits and the remaining 15% will be exempt from Canadian taxes.

- CPP/OAS Benefits for Canadians Living in the U.S.

- if Robert was a Canadian living in the U.S., his benefits would only be taxable in the U.S. When it comes to taxes, the Internal Revenue Service sees CPP/OAS benefits as equivalent to U.S. Social Security benefits. This means that Robert should report this income on his 1040 form, and it will be taxed at the 85% inclusion rate. Another upside of the U.S./Canada totalization agreement: CPP and OAS income aren’t taxable in Canada and aren’t subject to Canada Revenue Agency withholding for non-residents.