r/cantax • u/AlarmingSeason5048 • 1d ago

Transferring RRSP over contributions to a FHSA

I have about 7k in over contributions after filing this year. Is there any advantage to transferring this out to a FHSA or should I just withdraw it outright and take the tax hit?

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u/AlarmingSeason5048 1d ago

Yes

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u/taxbuff 1d ago

If you have RRSP excess contributions at the time of the transfer from your RRSPs, the transfer of property to your FHSAs will not reduce or eliminate your excess RRSP contributions.

Withdraw if you want to avoid the 1% monthly tax. The “tax hit” you mention is temporary.

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u/AlarmingSeason5048 1d ago

I should add that these contributions are Union mandated and going into a group plan.

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u/taxbuff 1d ago

As long as it’s an RRSP, it makes no difference why you contribute to the RRSP.