Tax deduction %

How much tax % wise should I get cpp to take of monthiy payments

10-15%. If you have the disability tax credit then it is unlikey you would have to pay anything.

I never paid over 13% when I was working but I have the DTC.
I’m going to decide how much they take off mine after I do my 2017 taxes.
I may just keep it and pay them at tax time, my CPP-D is not much money anyways and my LTD is not taxable.

Hi allyoops,

I was approved for CPP-D in February 2020 and Service Canada sent my insurance company the lump sum because I signed the irrevocable consent form. I was recently deemed eligible to receive the Disability Tax Credit from 2010 to 2025. So, I received a retroactive payment from the Canada Revenue Agency going back 10 years. Does the Disability Tax Credit make me completely exempt from paying any taxes on those lump sum amounts? Looking forward to your reply. Thanks.

The DTC lowers your taz payable (%).
You owe less tax on the lump sum but it’s not $0.

“Finally, you can apply for the Disability Tax Credit – If you apply for and are granted the Disability Tax Credit any tax you may owe on a lump sum disbursement can be virtually, if not completely, eliminated.”

The quote above was taken from the following link…

The reason why I asked if I was completely exempt is because it says “VIRTUALLY, if not COMPLETELY ELIMINATED.”

Jammer, did you have firsthand experience with the DTC and paying taxes on lump sums?

Yes I do.
I didn’t pay tax but my lump sum was only for a year and I don’t have any other taxable income.
If your situation is similar then you won’t owe tax.

When I receive a lump sum from CPP Disability do I call Income Tax to find out how much I owe? How does it all work?

You should receive a statement from Service Canada with a breakdown by year of what you received. This way you won’t be taxed all in the same year thus lowering the amount payable.

Thanks for the information. I’m still in the 90 phase with Service Canada if they wants to appeal the Tribunal’s decision.