Personal Finance

Canada Revenue is charging me for TFSA Assessment

  • Last Updated:
  • Jul 16th, 2020 6:39 pm
[OP]
Member
May 4, 2020
320 posts
64 upvotes
Toronto, On

Canada Revenue is charging me for TFSA Assessment

Hi
Last year, I had money in my TFSA but I needed it and took it back. Last year (2018), Canada Revenue charged me for over contributing to TFSA, which I did not know there was a limit. But this year (2019) I do not understand why they are charging me for what is called "TFSA Assessment" and it is alot of money, that I can not really pay it. I do not have any money in my TFSA? Do I need to maintain a certain amount in that account. I really did not want this headache TFSA. I believe it is a scam.

Thank you very much
30 replies
Deal Addict
Feb 22, 2007
2024 posts
267 upvotes
Mississauga
you will get charged if you contribute more than the limits....

also, if you contribute within the year...remove the money and contribute again in the same year...it's an excess contribution....
Deal Addict
User avatar
Dec 24, 2007
1676 posts
2112 upvotes
BC
Doesn't help if you don't provide any details....
Deal Fanatic
Jan 21, 2014
6824 posts
4231 upvotes
It could be the FI didn't report your withdrawal so CRA still has the record you over contributed? Login to CRA account and see what is your TFSA status there
[OP]
Member
May 4, 2020
320 posts
64 upvotes
Toronto, On
Like what? Thank you.
WetCoastGuy wrote: Doesn't help if you don't provide any details....
Deal Addict
Jun 26, 2019
1960 posts
1695 upvotes
GTA
lwlwlwlw wrote: Last year, I had money in my TFSA but I needed it and took it back. Last year (2018), Canada Revenue charged me for over contributing to TFSA, which I did not know there was a limit. But this year (2019) I do not understand why they are charging me for what is called "TFSA Assessment" and it is alot of money, that I can not really pay it. I do not have any money in my TFSA? Do I need to maintain a certain amount in that account. I really did not want this headache TFSA. I believe it is a scam.
I assume your first "last year" means 2018.

Your first step would be to log into you account, CRA account that is, and look at the bottom of the main page. There it will show you how much contribution room you have in 2020. Assuming you havent put anything in or taken anything out since 2018, should be simple math to calculate what your cap space is.

Then compare this amount to the amount you have or had in your TFSA.

As others have said, there may be a reporting issue. If you amount has been zero since 2018, the last year assessment amounts dont make sense. I assume you got charged in 2018 and paid?
Deal Addict
Jun 26, 2019
1960 posts
1695 upvotes
GTA
lwlwlwlw wrote: Like what? Thank you.
Refer to my above post, I think that's your first step just to do the checks yourself.

You could post your age, how much you deposited/withdrew, how much money is in the account, etc, but that's all pretty personal info, so probably better to try and resolve it by yourself first.
[OP]
Member
May 4, 2020
320 posts
64 upvotes
Toronto, On
Thank you, I see the following:
++++++++++++++++++++++++++++++++++++++++++++++
2019 assessment – July 14, 2020

Part A - Tax on excess TFSA amounts :$5,996.90
Part B - Tax on non-resident contributions
Part C - Tax on non-qualified investments
Part D - Tax on prohibited investments
Part E - Additional tax on prohibited investments
Part F - Tax on an advantage
Total tax payable :$5,996.90
Minus refund on tax on non-qualified investment :$0.00
Minus refund on tax on prohibited investment :$0.00
Net tax payable :$5,996.90
++++++++++++++++++++++++++++++++++++++++
mkl38s wrote: It could be the FI didn't report your withdrawal so CRA still has the record you over contributed? Login to CRA account and see what is your TFSA status there
Deal Fanatic
Jan 21, 2014
6824 posts
4231 upvotes
lwlwlwlw wrote: Thank you, I see the following:
++++++++++++++++++++++++++++++++++++++++++++++
2019 assessment – July 14, 2020

Part A - Tax on excess TFSA amounts :$5,996.90
Part B - Tax on non-resident contributions
Part C - Tax on non-qualified investments
Part D - Tax on prohibited investments
Part E - Additional tax on prohibited investments
Part F - Tax on an advantage
Total tax payable :$5,996.90
Minus refund on tax on non-qualified investment :$0.00
Minus refund on tax on prohibited investment :$0.00
Net tax payable :$5,996.90
++++++++++++++++++++++++++++++++++++++++
That was your Notice of Assessment right? See your TSFA section at the bottom of the page, like how much room you have for contribution
Deal Addict
Nov 13, 2013
3519 posts
2131 upvotes
Ottawa
mkl38s wrote: That was your Notice of Assessment right? See your TSFA section at the bottom of the page, like how much room you have for contribution
That's a lot of excess. Were you taking money in and out all during the year? If so you might be able to ask for a waiver as you misunderstood the rules. If you take money out you can not put it back in until the next calendar year.
Sr. Member
Oct 27, 2012
518 posts
302 upvotes
fogetmylogin wrote: That's a lot of excess. Were you taking money in and out all during the year? If so you might be able to ask for a waiver as you misunderstood the rules. If you take money out you can not put it back in until the next calendar year.
Technically you could if your contribution after withdrawal is still within your contribution room for that year?
Deal Fanatic
Jan 21, 2014
6824 posts
4231 upvotes
Penalty is 1% of the over contributed amount per month. Let's say last year OP took out all $75K and then put it back in, Penalty would be $750 per month. If OP did it in Feb and didn't realize till November where OP empty the account again, 8x$750 would be close to $6K of penalty there. Am I close?
Deal Addict
Nov 13, 2013
3519 posts
2131 upvotes
Ottawa
Supertrash17 wrote: Technically you could if your contribution after withdrawal is still within your contribution room for that year?
Well yes but this is not new contribution room. It's a good point and why they asked OP's age.
Deal Fanatic
Jan 19, 2017
7202 posts
4211 upvotes
fogetmylogin wrote: Well yes but this is not new contribution room. It's a good point and why they asked OP's age.
So they can figure out his contribution limit if he is young.
Deal Addict
Nov 13, 2013
3519 posts
2131 upvotes
Ottawa
ml88888888 wrote: So they can figure out his contribution limit if he is young.
Yes but he has over contributed something like $50k or maybe has put small amounts in and out dozens of times. Either way he needs to understand the rules and should ask for a waiver of the penalty. Probably avoid contributing at all this year until he figures out the rules.
Deal Addict
Jan 2, 2015
1633 posts
638 upvotes
Toronto, ON
OP needs to answer these questions:

How old are you, or what year did you turn 18? (If OP is young, their limit will be low. The limit does not grow until they turn 18.)

What is your residency status, and does the CRA have the correct status? Your limit does not increase in years where you were out of the country. Many people do not adequately inform the CRA when they enter or leave the country long term.

Find out what your current limit is. If your contributions are in excess, make withdrawals equal to the excess so you won't get hit even harder in the future.
Last year, I had money in my TFSA but I needed it and took it back.
If you take money out of your TFSA, you do not get that room until the next year. So if you put $10,000 in, then took $10,000 out, then put $10,000 in, you have made $20,000 of contributions even if it's the "same" money.
Deal Addict
Jun 18, 2018
1481 posts
933 upvotes
Toronto
I really did not want this headache TFSA. I believe it is a scam.


With that mindset, you will always remain poor.
Deal Fanatic
Jan 19, 2017
7202 posts
4211 upvotes
Electrah wrote: I really did not want this headache TFSA. I believe it is a scam.


With that mindset, you will always remain poor.
If you don't want to learn all the rules, then you can't call a scam. it is like driving. would you call a scam?
Sr. Member
Feb 13, 2008
772 posts
484 upvotes
Edmonton, AB
To be honest I am sick and tired of people who do not read and follow the TFSA rules!
Member
Apr 16, 2020
372 posts
475 upvotes
ml88888888 wrote: If you don't want to learn all the rules, then you can't call a scam. it is like driving. would you call a scam?
With that in mind, we do require people to obtain a licence in order to drive, which involves displaying a rudimentary understanding of the rules. I'm not aware that the same can be said for opening a TFSA.

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