Employees aged 65 to 69 who receive CPP or QPP retirement benefits may elect to stop contributing to CPP.

The issue

In a recent Tax Court of Canada case, CRA argued that an election to stop CPP contributions was invalid because the taxpayer had not yet received their first CPP payment—even though benefits were later paid retroactively.

The court’s decision

The court rejected CRA’s interpretation, stating that slow processing should not prevent taxpayers from making a valid election. Because CPP benefits were ultimately payable retroactively, the election was valid.

Action: Eligible individuals should file elections promptly and retain documentation, particularly when processing delays are involved.