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Who claims the CPP Death Benefit: Is the CPP Death Benefit Taxable?

If there is an existing estate, the designated executor in the will or the individual appointed by the Court to manage the estate is responsible for applying for the death benefit.

The executor is advised to apply within 60 days from the date of death. In the absence of an estate application or if the executor has not applied for the death benefit, others may apply in the following order:

  1. The entity or person responsible for covering the deceased’s funeral expenses.
  2. The surviving spouse or common-law partner of the deceased.
  3. The next-of-kin of the deceased.
Who claims the CPP Death Benefit: Is the CPP Death Benefit Taxable?

Is the CPP Death Benefit Taxable?

Yes, the CPP death benefit is taxable in Canada.

If an estate is the recipient of the death benefit, the amount is incorporated into the estate’s taxable income, specifically on line 19 of the trust’s T3 income tax and information return in the year when the payment is received.

If an individual beneficiary receives the death benefit, they must report the amount on their income tax and benefit return, specifically on line 130, in the year when the payment is received.

It is unlikely that the death benefit will be subject to taxation if the recipient is not a beneficiary of the estate, and the following conditions apply:

  1. The taxpayer who received the death benefit has covered the deceased’s funeral expenses.
  2. The death benefit amount does not exceed the funeral expenses.
  3. The deceased has no heirs, and there is no other property in the estate.

How Much is the CPP Death Benefit?

The Canada Pension Plan provides a death benefit, with a maximum amount of $2,500, which is disbursed if the deceased individual has contributed to the CPP.

This benefit applies to seniors and is part of the income and financial support provided by the CPP/OAS.

CPP Death Benefit Application Form

Here, is the form that you need to fill out to apply for CPP death benefit.

Canada Pension Plan Death Benefit Application Form.