FHSA
In the year a FHSA account is opened and each subsequent year, a person can contribute $8,000 per year up to a maximum of $40,000 in total.
If less than $8,000 is contributed in a year the balance can be carried forward to the next year. For example if an account was opened in 2024 and $6,000 is contributed then $2,000 is carried forward to 2025. In 2025 the person can contribute $10,000 ($8,000 + $2,000).
But the maximum carryover is $8,000. For example, if a person contributed $0 in 2024 and $1,000 in 2025, the carryover into 2026 is not $15,000 ($8,000 + $7,000). Instead the carryover is limited to the maximum $8,000. Therefore in 2026 the person could contribute $8,000 (the amount for 2026) + $8,000 (the maximum carryover). In any given year the contribution amount can never be more than $16,000.
If an FHSA account is opened but no contribution is made in that opening year, the person must still file a Schedule 15. This will cause the CRA to report a participation room of $8,000 for that year of opening, which will be carried over into the next year. After the first year of opening, the CRA will issue a Participation Room Statement for each subsequent tax year. The statement may be attached to a Notice of Assessment, or may be found in a CRA account. To find it in an online account, click the ‘Savings and pension plans’ tab and then select ‘View FHSA details’ in the FHSA section. The Statement will contain various numbers that are needed to properly complete Schedule 15.
UFile Steps:
Steps need to be taken if the client made a contribution, or if they opened an account (with or without making a contribution.
1. If there is a T4FHSA slip, enter it by selecting the slip from the section, ‘T4A, T4FHSA and pension income’.
2. In the interview section on the left, click ‘HBP, LLP, FHSA and other plans and funds’ and go to the section, ‘FHSA information and limits’. Complete the section using information from the prior year’s Schedule 15, and the Participation Room Statement. The Statement may be found attached as part of the prior tax year’s Notice of Assessment, or in the client’s CRA account, under the ‘Savings and pension plans’ section.
3. In UFile’s ‘Tax Return’ section, review Schedule 15 and ensure it properly reflects the client’s situation. The client’s contribution for the year should not have been greater than the amount on Line 51 of the Schedule.
Note: It is unclear if using AFR will download the amounts from the Participation Room Statement.
Note: It is unclear if the Participation Room Statement is available to view by CVITP (level 1) representatives though represent-a-client service. But probably.
Situation:
Clients are a married couple, newcomers I think in 2024 (or else 2023). They opened an FHSA account in 2024 but made no contribution and I believe they had no FHSA slip to enter in 2024 (although it seems there was some sort of $5 contribution made through Wealthsimple). The clients had their 2024 return done at Woodgreen as well.
In 2025 they made a $15,000 contribution and had a T4FHSA slip. This slip was entered. Since they opened up their account in 2024 and little or no contribution, their participation room in 2025 is $16,000 ($8,000 + $8,0000).
My concern is that CRA might find that they overcontributed if some steps were not taken. The steps are:
1. In 2024 it is necessary to generate a Schedule 15, regardless of whether there is a contribution. This can be done in UFile but I don’t know if this was done.
2. If a Schedule 15 was generated in 2025 then the CRA should generate a Participation Room Statement which has to be entered in 2025 UFile in addition to the T4FHSA slip. We looked for that statement in their 2024 NOA and in their MyCRA account but did not find it. We used AFR which is supposed to automatically download the Statement amounts, but I didn’t see evidence that that happened.
Note I recall the clients have access to their CRA account, and therefore changes could be done in their account rather than mailing in a T1-Adj form.
Possible communication to client:
We had a discussion with our volunteer, Rob, who prepared your income tax return on March 14th. We understand that you entered an FHSA contribution. It’s possible that some further steps may be needed to ensure the CRA assesses your return properly.
Once you receive your Notice of Return, if the Notice advises you of any issue, including possibly an FHSA over-contribution, or if you have any concerns about the return, then we recommend that you make an appointment and we can review your Notice of Assessment and Return with you. It is possible you may need to revise your 2024 Tax Return to notify the CRA that you opened a TFSA that year. This notice is normally done by including a completed Schedule 15 with your 2024 return. If that wasn’t done then we can help you make a change to add that schedule.