Old Age Security for Non-Residents of Canada Explained
The 20-year rule, the six-month continuation, the treaty exemption from the clawback, and U.S. taxation
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
Old Age Security is paid to non-residents of Canada only if they lived in Canada at least 20 years after age 18. Most non-residents file an annual world-income return, and the recovery tax claws back part of the pension above a threshold; U.S. residents are exempt from both, because the treaty taxes their OAS only in the United States.
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Eligibility abroad
| Requirement | Rule |
|---|---|
| Payment outside Canada | Lived in Canada at least 20 years after age 18 (otherwise payments continue only for the month you leave and the six months after) |
| Amount | Partial pension of 1/40th per year of Canadian residence after 18 (full at 40 years) |
| Totalization | U.S. periods may help meet the minimum for eligibility but don't increase the amount (the totalization guide) |
The annual return and the clawback
Most non-residents file the Old Age Security Return of Income (Form T1136) by April 30 each year reporting world income; if the CRA doesn't receive it, OAS payments stop beginning in July. The recovery tax is 15 percent of net world income above the threshold (C$93,454 for 2025 income; C$95,323 for 2026), deducted monthly from the July-to-June payments that follow. U.S. residents are exempt: the United States is on the CRA's treaty list, so they neither file the return nor pay the recovery tax.
Taxation
Under the treaty (Article XVIII(5)), Canadian social security benefits — OAS, CPP, QPP — paid to a U.S. resident are taxable only in the United States, as if they were U.S. Social Security benefits (up to 85 percent included in income); Canada withholds neither Part XIII tax nor recovery tax on OAS paid to U.S. residents. The NR4-OAS slip reports the payments.
Frequently asked questions
Can I get OAS if I live in the United States?
Yes, if you lived in Canada at least 20 years after age 18.
Do I have to file anything to keep OAS abroad?
Not as a U.S. resident — the United States is on the CRA's treaty list, so no Old Age Security Return of Income is required; residents of most other countries must file one each year.
Does the OAS clawback apply to U.S. residents?
No — because the treaty makes OAS taxable only in the United States, the CRA exempts U.S. residents from the recovery tax.
Is OAS taxed in Canada or the U.S.?
In the United States only, for a U.S. resident, under the treaty.
Official sources
For non-residents who must file (residents of non-treaty countries), the Government of Canada explains: “You must send the Old Age Security Return of Income form to the Canada Revenue Agency (CRA). If the CRA does not receive this form, you will stop receiving your OAS payments beginning in July.” — Government of Canada, Old Age Security pension recovery tax, https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html
The IRS explains: “Under Article XVIII, pensions and annuities from Canadian sources paid to U.S. residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity).” — Internal Revenue Service, Publication 597 (10/2015), Information on the United States–Canada Income Tax Treaty, https://www.irs.gov/publications/p597
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle Canadian pension planning for U.S. residents — Old Age Security eligibility abroad, the treaty exemption from the recovery tax, and treaty taxation of Canadian benefits. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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