RRSP and withholding tax: Questions and answers
Q. Can I transfer any or all my RRSP accounts to my spouse’s RRSP account?
A. Registered money cannot be transferred from one spouse to another while both parties are living.
Q. I need to withdraw money from my RRSP account. What is the minimum withholding tax rate applicable to this transaction?
A. Withholding tax rates are based on the gross amount of the withdrawal. The following mandatory minimum withholding tax rates are applicable:*
|Withdrawal (net of DSC fees)||Withholding tax rates||Quebec withholding tax rates|
|$0.00—$5,000.00||10%||20% (5% Fed + 15% Provincial)|
|$5,000.01—$15,000.00||20%||25% (10% Fed +15% Provincial)|
|$15,000.01 and over||30%||30% (15% Fed + 15% Provincial)|
* Mandatory minimum withholding tax rates for Canadian residents
Q. Is there a way to withdraw from my RRSP without paying tax penalties?
A. Yes, there are two options that allow you to withdraw from your RRSP without paying tax penalties for a given period. However, it is important that you do not include the withdrawals as income when you file your taxes.
- Home Buyers Plan (HBP). If you are a first-time home buyer and plan to buy or build a place within one year of your withdrawal, you may withdraw up to $35,000 from your or your spouse’s RRSP and not incur withholding tax on your withdrawal, so long as you contribute your withdrawal back into your RRSP within 15 years.
- Lifelong Learning Plan (LLP). If you have enrolled or received an offer from a qualifying educational institution before March of the following year, you may withdraw from your or your spouse’s RRSP and not incur withholding tax on your withdrawal. The annual limit you can withdraw from your RRSPs is $10,000 up to $20,000 under an LLP. There is no limit to how many times you may participate in the program, as long as you repay it entirely.
Q. How can I determine how much I can contribute to my RRSP account?
A. The amount you can contribute, or your “contribution room,” is determined by your earned income. Your yearly contribution room is based on 18% of your previous year’s income, less any pension adjustment. The annual dollar limit varies from year to year: it’s $29,210 for 2022 and it will be $30,780 for 2023. Thereafter, the limit will be indexed to average wage growth. Keep in mind that unused contribution room can be carried forward indeﬁnitely to future years. CRA will advise you, by notice of assessment, of your contribution room.
Q. I have over-contributed to my RRSP account and I am facing penalties from CRA. How can I correct this?
A. To correct this, you can complete a T3012A form and submit it to CRA. Upon approval, you can submit this form to Fidelity and withdraw the applicable amount, without incurring withholding taxes.
Q. I withdrew funds from my Fidelity RRSP account for the Home Buyers Plan. I am now required to commence repayments. Do I have to repay the Fidelity RRSP account from which I took the funds, or can I contribute to any one of my RRSP accounts?
A. Repayments under the Home Buyers Plan can be made to any of your RRSP accounts. It does not have to be to the account from which you made withdrawals. You cannot, however, contribute to a spousal account and have it deemed as a repayment.
Q. I have special permission from CRA that allows me to withdraw funds from my RRSP account without incurring withholding tax. Can Fidelity accommodate this?
A. Fidelity does not administer any special tax treatment for individual unitholders. Fidelity will apply standard tax rules based on CRA guidelines, and it is up to individual unitholders to apply for special tax consideration when they do their tax returns.
Q. I would like to apply for an RRSP loan. Can I apply for this loan through Fidelity?
A. RRSP loan applications must be initiated through the third-party company of your choice. Please consult your advisor if the RRSP loan you have selected allows investments from Fidelity.
Tax slips and statements
Q. Do I have access to 2022 tax year documents through ﬁdelity.ca?
A. Yes: if you have a login proﬁle, you will have access to all applicable tax documents since the inception of your account.
Q. I do not have a login proﬁle on ﬁdelity.ca and I need 2022 tax year duplicate documents. Where do I obtain these duplicate documents?
A. You can obtain 2022 tax year duplicate documents by contacting our Client Relations department at 1 800 263-4077. We are ready to support you from Monday to Friday, between the hours of 8:00 a.m. and 8:00 p.m. ET.
Q. I believe the information on my tax documents is incorrect. Where should I communicate my concerns?
A. You can contact our Client Relations department at 1 800 263-4077. We are ready to support you from Monday to Friday, between the hours of 8:00 a.m. and 8:00 p.m., ET.