Tag Archives: contribution

Lookup your TFSA Contribution Room Online Using CRA’s Quick Access

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You can’t check your TFSA contribution history using the Canada Revenue Agency’s Quick Access online program. You can, however, check how much contribution room is left in your TFSA using the CRA’s Quick Access system.

Information You May Need to Check your TFSA Contributions Online

You will probably need the following info to use Quick Access

  • your Social Insurance Number (SIN)
  • your full date of birth
  • the amount you reported on line 150 (Total Income) of your last tax return that has been filed and processed by the CRA. You may need this for the last year or for the year before that. The number you need is what you reported, not what the CRA reported on your Notice of Assessment. Sometimes the CRA came up with a different value than you did.

You can check whether the Quick Access system is working and ready to handle your request by checking its hours of service at: http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/qckccss/hrs-eng.html.

To Check your TFSA Contributions and Contribution Room Using CRA’s Quick Access

  1. Go to http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/qckccss/menu-eng.html
  2. Review what you will need by clicking on the Before You Start link.
  3. Click the Sign in button.
  4. Type in your Social Insurance Number, SIN.
  5. Click on the Continue button.
  6. Enter your date of birth by typing in your year of birth and selecting your month of birth and day of birth from the drop-down lists.
  7. Type the amount from line 150, Total income, from your previous year’s completed and accepted tax return. Do not just use the amount from your Notice of Assessment, use the value from your actual return.
  8. Click on the Continue button.
  9. Read the Terms and Conditions of Use.
  10. If you agree, click on the I agree link. (If not, click on the I do not agree link.)
  11. The next screen will tell you:
  • when your last tax return was assessed
  • when a refund was deposited in your account, if applicable
  • and provide links to check
    • your RRSP deduction limit
    • your TFSA contribution room
    • your benefit payment status for
    • the Canada Child Tax Benefit (CCTB)
    • the GST/HST credit
    • the Universal Child Care Benefit (UCCB)
  • You can also click the link to Request a remittance form.

If you check your RRSP deduction limit, remember it still includes any RRSP contributions you have made since you last submitted your income tax forms. So if you bought $750 of RRSP investments since your last tax return, and the reported deduction limit is $1000, you actually only have $250 of room left to contribute to your RRSP.

The TFSA contribution room is reported based on information from banks and other financial institutions received before January 1. It is not always up to date. For example, if you made a TFSA contribution on Dec 31, it is not likely in the number reported for January 1. You can check the details of what they are using by phoning the CRA at 1 800 959 8281 or by going online using the My Account service.

Based on what happened to some Questrade customers it might be worth checking your TFSA contribution room once in a while in case any mistakes have been made.

When you are finished click on the red Logout button at the top right side of the screen.

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Questrade the CRA and the Double TFSA 2011 Contribution Confusion

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At the beginning of March 2013 a person posted to RedFlagDeals that they had received a letter from the Canada Revenue Agency advising them that they had contributed too much to their TFSA in 2011 and that they owed a large fine to the tax department. The investor knew they had not over contributed and started immediately checking into the problem. The error was made by Questrade. Apparently, due to a computer system change, some contributions were reported twice to the CRA. For example, investors who had contributed $5000 were reported as contributing $10000. This led to massive confusion.

This problem is also discussed on the Canadian Money Forum.

What is the Penalty for an Over Contribution to a Tax Free Savings Account?

When TFSAs were first introduced in 2009 all sorts of people immediately started trying to test the system to maximize their profits and minimize their taxes. The CRA set up a penalty for people who contributed too much to their TFSA. That penalty was set at 1% of the amount of extra money deposited in the TFSA per month! So if an investor contributed an extra $1000 they would owe $10 a month for each month the over contribution stayed in the TFSA. That means for a year, the penalty would be at least 12%, a cost much higher than the average benefit of investing.

This 1% is charged based on the highest over contribution during a month. So if you invested $5500 too much on, say, January 1, and removed it on January 3, you would still owe the $50 penalty for that month.

Isn’t It Worth Cheating and Contributing Too Much to a TFSA Even with the Penalty?

The investor will also owe taxes on any money earned by the over contribution. So there is no benefit to over contributing. You might as well invest it outside of your TFSA and pay the tax on any earnings. It’s cheaper than investing it in the TFSA, paying the 1% per month penalty and STILL paying the tax on any earnings.

You can check the Canada Revenue Agency website for examples of taxes and penalties payable on over contributing to a TFSA at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/xcssxmpl-eng.html#xmpl3  and the tax form for reporting tax owing as a penalty and as regular tax (Advantage section) on income http://www.cra-arc.gc.ca/E/pbg/tf/rc243/rc243-12e.pdf .

The Questrade Error Is Being Resolved with the Canada Revenue Agency

The Questrade error appears to have only affected contributions made between January 1 and February 4, 2011 based on information discussed by clients on RedFlagDeals.

What Should You Do If Questrade Reported Your Contribution Twice?

Questrade will be sending a corrected version of the information on contributions to the CRA.

Some investors, however, have decided to document the problem with the CRA TFSA Processing Unit. They have sent letters detailing what they contributed and when.

Where Should I Send My Explanatory Letter to the TFSA Processing Unit of the CRA?

The address reported on the CRA website is
TFSA Processing Unit
PO Box 9768 Station T
Ottawa ON K1G 3X9

However, the CRA has reported that it is unnecessary to call or write them at this time as Questrade has advised them of the problem and that it is sending a corrected information file as soon as possible.

You Can Check Your TFSA Contribution History on Line

It’s actually possible to check what the CRA thinks your TFSA contributions have been by using the Canada Revenue Agency website using My Account or Quick Access, or from TIPS the telephone information system. The Tax Information Phone System will only tell you the amount of unused TFSA contribution room as of January 1 of the current year.

UPDATE: Questrade Errors Fixed

According to posts on Redflagdeals.com, the correct information has been supplied to the CRA by Questrade and the corrections have now been implemented. As of April 24 2013 and onwards several forum users have reported their errors have been fixed and the CRA My Account feature now has the correct information for their contributions to TFSAs at Questrade.

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Have you ever been assessed a penalty for over-contributing to your TFSA? Was it satisfactorily resolved? Please share your experiences with a comment.