Was resident of CAD and worked as contractor in US at same time. Got 1099Misc income box7, paid Social Sec in US. CRA asking for CPP to pay on CAD taxes too. Pls guide?

[Ray-Tony]

For year 2016, I was considered as factual resident of Canada because my family (wife and kids) was living in Canada and I was working and residing in the USA.                      

I have received 1099 MISC (Box 7) income due to my contract work in USA, considered as independent contractor (self employment income). I have deducted social security and other taxes in the United States for that particular year. I have also filed my tax returns in Canada and showed income from USA under international income (comes under Line 104 as - Other employment income).             

Now CRA is asking to pay CPP in Canada too because, for that particular year I was considered as resident of Canada and the income from USA due to self-employment at the same time. CRA further said, If I were an employee in USA then I were not needed to pay CPP in Canada. CRA is referring USA and Canada social security agreement for this.                

Now please guide, should I still have to pay CPP in Canada under this scenario? If not then what argument should I put forward to CRA.

[TurboTaxJeffrey]

When you filed the income at line 104 as "other employment income" this was incorrect, as you were not employed...but rather self employed.  You needed to report the income as such...and yes, self employed income is subject to CPP deductions.  It is calculated on the Canadian tax return.  You are also responsible for both the employee and employer portion of CPP.  This means you are subject to 9.9% of the net income of your self employment earning less $3500 (the basic exemption).