C-305
First Session, Thirty-ninth Parliament,
55 Elizabeth II, 2006
HOUSE OF COMMONS OF CANADA
BILL C-305
An Act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents)
first reading, May 17, 2006
Mr. Watson
391340
SUMMARY
The purpose of this enactment is to reduce from 85% to 50% the inclusion rate on United States social security payments received by Canadian taxpayers.
The “inclusion rate” is the percentage of United States social security payments to be included as income by a Canadian taxpayer. The Canada-United States Tax Convention Act, 1984 provides for 15% of such payments to be non-taxable in the hands of Canadian residents, thus resulting in an 85% inclusion rate.
This enactment provides for an additional 35% of United States social security payments to be excluded from taxable income. The enactment therefore increases the exemption to 50% and decreases the inclusion rate to 50%.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
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1st Session, 39th Parliament,
55 Elizabeth II, 2006
house of commons of canada
BILL C-305
An Act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents)
R.S., c. 1 
(5th Supp.)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1. Subsection 81(1) of the Income Tax Act is amended by adding the following after paragraph (f):
United States social security
(f.1) 35% of the aggregate of all amounts paid to the taxpayer in the taxation year by or on behalf of the government of the United States as a benefit under United States social security legislation, which percentage is in addition to the 15% of such aggregate that is exempt from Canadian tax pursuant to paragraph 5(a) of Article XVIII of the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, as amended by Schedule V to the Canada-United States Tax Convention Act, 1984;
2. This Act comes into force on a day to be fixed by order of the Governor in Council.
Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services CanadaOttawa, Ontario K1A 0S5Telephone: (613) 941-5995 or 1-800-635-7943Fax: (613) 954-5779 or 1-800-565-7757publications@pwgsc.gc.cahttp://publications.gc.ca