  HBP / FHSA |
Use the keyword RRSP-Home to enter the year of the first withdrawal from the RRSP for purposes of the home buyers' plan.
Note that certain rules limit the RRSP deductions for contributions made to a RRSP during the 89 day period just before the withdrawal under the HBP. It is preferable for him to withdraw the funds required for home purchase by application on the T3012A rather than via the home buyer's plan.
According to the CRA rulings, the taxpayer will have lost the deduction not only for the year (by having the RRSP contribution deducted on line 20800 added back into income on line 12900) but for all subsequent years as well. He will have to repay the RRSP, but will have lost the ability to deduct it from revenue on the T1 return.
Initial amount withdrawn from the RRSP with respect to the taxpayer's home buyer's plan.
Use Early-Paymt to enter the previous repayments made before the date that repayments were required.
You can choose to begin the repayments earlier but the repayment period will remain the same. Any repayments made before the date that they are due will reduce the actual amount to repay for the first year of the repayment period.
Amounts withdrawn from the plan which have not been used to buy a home.
The amount outstanding at the end of the year.
Use Desig-Paymnt only to designate the amount of RRSP contributions (indicated with RRSP-Contrib) that the client has repaid in the current tax year to his RRSP home buyers' plan.
This entry is only required if the client wishes to designate an amount greater than the minimum repayment amount required in the year. DT Max automatically determines the minimum amount required and designates an amount up to the minimum unless otherwise indicated with Desig-Paymnt .
Note that the amount indicated with Desig-Paymnt will be limited to the RRSP contributions entered in the RRSP group, including undeducted premiums of the client's own plan.
All contributions to an RRSP must be entered in the RRSP group. Only amounts contributed to the taxpayers' own plan can be designated as repayments to the home buyers' plan. Entering the amount here only lets DT Max know of this designation. The contribution must also be entered as an RRSP contribution.
Pursuant to your Home Buyers' Plan (HBP) - Statement of account, enter the amount that you are required to pay for the current year.
If you did not receive a statement and your repayment period has started, you can calculate the minimum amount to repay for the year by dividing your HBP balance by the number of years remaining in your repayment period.
If you repay less than the required amount, the difference will be included as RRSP income on your tax return.
HBP repayable balance - the amount required to contribute to your RRSPs or PRPPs and designate as a repayment. This new element usually occurs during the first year of the HBP where a customer only reimburses part of the HBP but the rules of the HBP provide for a grace year, so when a customer begins the reimbursement, the government lets him know that a portion has been paid.
HBP update-Date
HBP repayments to date
HBP required repayment
Use the keyword FHSA and select the year of the opening of the FHSA.
Your FHSA participation room for the year is the maximum amount that you can contribute to your FHSAs or transfer from your registered retirement savings plans (RRSPs) to your FHSAs in the year without creating an excess FHSA amount.
Your FHSA participation room in the year that you open your first FHSA = $8,000
The lifetime FHSA limit = $40,000
All contributions you make to your FHSAs and all transfers from your RRSPs to your FHSAs will reduce your remaining lifetime FHSA limit. If your contributions and transfers to your FHSAs in the year exceed your FHSA participation room for the year, you will have an excess FHSA amount.
You may need to pay taxes if you contribute or transfer more to your first home savings accounts (FHSAs) than your FHSA participation room for the year allows.
You will have an excess FHSA amount if the total of your contributions to your FHSAs and transfers from your registered retirement savings plans (RRSPs) to your FHSAs in a year are more than your FHSA participation room for that year.
Generally, you have to pay a tax of 1% per month on the highest excess FHSA amount in that month. You will continue to pay the monthly 1% tax until the excess FHSA amount is eliminated. Your excess FHSA amount will be reduced or eliminated by your new FHSA participation room (on January 1 of the following year), or by removing amounts from your FHSAs. If you have an excess FHSA amount, you must file a return to report your excess FHSA amount and determine the amount of tax payable.
An excess FHSA amount can be reduced or eliminated by any of the following: - Making a withdrawal of a designated amount from your FHSAs (designated withdrawal);
- Making a direct transfer of a designated amount from your FHSAs to your RRSPs or RRIFs (designated transfer);
- Making a taxable withdrawal from your FHSA;
- Any amounts deemed to be included in income if the account loses its status as an FHSA.
If you make a designated withdrawal, the amount of the withdrawal is not required to be included as income on your income tax and benefit return of that year.
If you make a designated transfer, the amount of the transfer is not required to be included as income on your income tax and benefit return of that year. A designated transfer will not impact your unused RRSP deduction room .
It is important to note that a designated amount is limited to the excess FHSA amount at the time of the designation. As a result, you are not able to designate an amount if you do not have an excess FHSA amount.
If you make a taxable withdrawal, the amount withdrawn must be included as income on your income tax and benefit return for the year received.
When to close an FHSA
Your maximum participation period begins when you open your first FHSA and ends on December 31 of the year in which the earliest of the following events occur: - the 15th anniversary of opening your first FHSA;;
- you turn 71 years of age;
- the year following your first qualifying withdrawal from your FHSA.
Enter the amount of FHSA contributions that you want to deduct on the tax return. You can generally deduct the contributions you make to your Tax-Free First Home Savings Account (FHSA) on your income tax and benefit return. However, you cannot deduct amounts that you transfer from your from your Registered Retirement Savings Plan (RRSP) to your FHSA.
Total contributions made to the FHSA in 2023 after the first qualifying withdrawal [Sch.15 L.2].
Amount of unused FHSA contributions available to deduct from line 21 of prior year Schedule 15.
Total net contributions made to the FHSA from line 5 of prior year Schedule 15.
Total net transfers made to the FHSA from prior year Schedule 15.
Annual FHSA limit of the prior years [Sch.15 L.11]
Total FHSA deduction in the prior years [Fed L.20805].
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Withdrawal