TFSA excess amount correspondence explained
The CRA may send out a letter or a proposed TFSA return to Canadians who, under certain situations, may have over contributed to their TFSA. You may also receive a proposed TFSA return if you made contributions to your TFSA while you were not a resident of Canada.
TFSA excess amount letter
If you receive a TFSA excess amount letter and you have already removed the excess amount, you do not have to do anything else. If you have not removed the excess, it should be removed immediately. For information on your current year room limit, go to My Account (for your room limit as of January 1) or complete Form RC343, Worksheet - TFSA contribution room if you have contributed to your TFSA in the current year.
Proposed TFSA return package
The proposed TFSA return package normally includes the following:
- Cover letter – It provides general information about TFSA rules and instructions regarding what you need to do to respond to the proposed return.
- RC243-P, Proposed Tax-Free Savings Account (TFSA) Return – This proposed TFSA return shows the taxes we have calculated and is based on the information we received from your issuers. The proposed TFSA return is not a formal assessment of tax.
Responding to the proposed return package
This proposed return does not represent a formal assessment of tax. Although you cannot file a notice of objection on a proposed TFSA return, the following options are available to you:
- If you agree with the information on the TFSA return, sign, date, and include your social insurance number. You can make your payment electronically, by going to My Payment—save time, pay online! We will issue an assessment based on this return.
- If you do not agree with the TFSA return and you would like us to review your situation, send a letter to the address indicated below. Include a detailed explanation and any additional documentation you may have about the excess contributions along with proof that your excess TFSA amount has been corrected.
Canada Revenue Agency
TFSA Processing Unit
Post Office Box 9768 Station T
Ottawa ON K1G 3X9
We will review your request and send you a letter explaining our decision. If we do not receive a response from you, we will issue an assessment based on the information on file. This assessment will include any penalties and interest that may apply.
If you still disagree with our decision, see What should you do if you disagree with your assessment?
Waiver of the TFSA excess contribution tax
If you determined that you must pay a tax on your TFSA excess contributions, you may ask in writing that the CRA waive the tax if:
- your excess contributions on which the tax is based arose due to a reasonable error; and
- you are taking, or have taken, reasonable steps to eliminate the excess contributions.
To consider your request, we will need a letter from you that explains:
- why you made excess contributions and why this is a reasonable error; and
- what steps you have taken to eliminate the excess contributions.
All supporting documents should be included with your letter, such as copies of your TFSA account statements that identify the date you withdrew your excess contributions, as well as any other correspondence that shows that your excess contributions arose due to a reasonable error.
For more information on relief from the assessment of late-filing penalties and interest, see Information Circular IC07-1, Taxpayer Relief Provisions.
Forms and publications
- Form RC243, Tax-Free Savings Account (TFSA) Return
- Form RC243-SCH-A, Schedule A – Excess TFSA Amounts
- Form RC243-SCH-B, Schedule B – Non-Resident Contributions to a Tax-Free Savings Account (TFSA)
- Form RC343, Worksheet - TFSA contribution room
- Tax payable on excess TFSA amount
- Tax payable on non-resident contributions
- What should you do if you disagree with your assessment?
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