“In January, I went to the Canada Revenue Agency (CRA) website, and in the Tax-Free Savings Account (TFSA) section, the contribution room displayed indicated $12,000. So I put $12,000 into my TFSA. But the figures were not up to date, and the maximum amount I was entitled to was only $6,000. I never received a message from the CRA to tell me that I was over the limit for my TFSAs. A CRA agent told me that I will receive a bill for a 1% per month penalty on the excess amount! I will have to pay more than $700 because the amount shown on the CRA page may not be up to date. »
– A reader
It is possible to check the contribution room for the registered retirement savings plan (RRSP) and the tax-free savings account (TFSA) in the My file section of the CRA website. And yes, you have to be careful: this information is not necessarily up to date at the time you consult it.
Sylvie Branch, CRA media relations, notes that the agency updates TFSA contribution room as new data becomes available.
“This includes updating the new annual dollar limit, which takes effect on 1er January every year,” she says.
The contribution room for TFSA holders shown in My Account is based on information provided to the federal government by financial institutions. “TFSA holders can expect their contribution room to be up to date once all annual information returns relating to their TFSAs have been processed by the Agency,” she says.
The TFSA annual information return must be filed no later than the last day of February following the calendar year to which it applies. A TFSA holder’s contribution room is then updated shortly after the Agency processes their annual information return.
“It is important that the holder compares the information on TFSA transactions in My file to the information in their own files,” notes Mme Branch.
As for the RRSP, the amount that can be deducted in any year is presented on the most recent notice of assessment, or in form T1028 entitled “Information about your RRSP”.
“The Agency may send a T1028 form if there are changes to the RRSP deductible maximum since the last notice of assessment or reassessment, or if the State of the RRSP deductible maximum is not included on the notice,” says Mme Branch.
The amount shown under “Savings and pension plans” in My Account is only updated towards the end of the calendar year, she says.
“To ensure that they do not exceed their contribution limit, individuals must refer to their notice of assessment or their most recent T1028 form. These documents are also available in My File. »