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Tax considerations for your registered account

Each year in February or March we make tax slips available to you in your Questrade account. What tax slips you receive depends on the following:

  • Your account type
  • The activity that took place in your account during the year
  • Your residency (i.e., the province, country you live in)

A tax slip can be generated if any of these activities occur, depending on the type of registered account:

  • Contributions
  • Withdrawals
  • Account income earned for US persons, from U.S. sources

We describe the specifics for each registered account type below.

You can find your automatically-generated tax slips here and review Important dates for tax slips which includes the expected dates on which the 2020 tax slips will be published. See also our complete list of tax resources.

  • SwitchArrow TFSAs - Tax Free Savings Accounts

    A Tax Free Savings Account (TFSA) is a tax-sheltered savings account. This means that income earned in the account (trading profits) is generally not taxed. While there are also no tax deductions when making contributions, you won’t be taxed or penalized for making any eligible gains when withdrawing the funds either. This means that income earned in the account is not taxed, so you do not receive a tax slip at tax time.

    An account holder who is considered a U.S person will receive a 1099-DIV and/or a 1099-INT for dividends and/or interest received in the account from U.S.-sourced investments.

    We report your TFSA contributions and withdrawals to the CRA annually by February 28, 2021. This means that TFSA contributions and withdrawals made in the 2020 tax year may not be reflected on the CRA website until after February 2021. The CRA holds a centralized record of your remaining contribution room. You can log on to the CRA website to view your balance.

    Overcontribution

    The penalty for overcontribution is 1% of the excess amount per month of overcontribution. The CRA provides more details in TFSA excess amount correspondence explained.

    Tax considerations for active traders

    If you trade actively, you need to be aware that you may be considered as a day trader by the CRA, which can have tax consequences—meaning that when you sell securities they could be considered as business income rather than capital gains, and as such would be fully taxed.

    Whether you are considered a day trader by the CRA can depend on a number of factors such as frequency of trades (especially intraday trades), whether this trading activity is a core part of your normal business activity, and other factors.

    If you are concerned about whether your trading income may be taxed as business income because of your frequent trading activity, please contact your tax or accounting advisor for guidance.

    Contributions made by non-residents

    If you are a non-resident of Canada, you can have a TFSA, provided you are over the age of 18 and have a valid SIN. New contributions will not be permitted, however you are able to transfer in an existing TFSA.

  • SwitchArrow RRSPs - Registered Retirement Savings Plans

    A Registered Retirement Savings Plan (RRSP) is a tax-sheltered savings account. Contributions made can qualify for tax deductions, and are not taxed until they are withdrawn. Funds can also be withdrawn without withholding tax for a Home Buyer’s Plan or Lifelong Learning Plan withdrawal.

    With an RRSP, you can expect to receive the following tax slips depending on the actions taken in your account from January 1, 2020 until March 1, 2021.

    Contribution receipt

    For contributions deposited...You receive...
    January 1–February 29, 2020One contribution receipt for each deposit; see under 2019 on the Tax slips page in your account
    March 5–December 31, 2020

    Note: Contributions received March 1-4, 2020 have been backdated to February 29, 2020

    One consolidated contribution receipt on January 18, 2021
    January 1–March 1, 2021One contribution receipt for each deposit, available about 3 weeks after each contribution is deposited
    • Contributions made in the first 60 days of 2021 can be claimed (deducted) for the 2020 or 2021 tax year, but not for both years. Whether you're claiming the contribution for 2020 or 2021, it must be entered as a contribution on your 2020 tax return.
    • Visit the CRA website for more information

    T4RSP/RL-2

    NR4

    • Receive an NR4 if you are a non-resident of Canada and a withdrawal occurs

    For answers to common questions, check out our RRSP Season - Frequently asked questions page.

  • SwitchArrow SRRSPs - Spousal Registered Retirement Savings Plans

    A Spousal Registered Retirement Savings Plan (SRRSP) is a retirement savings account in which the account holder can receive contributions from their spouse (also called the contributor) on their own behalf.

    With an RRSP, you can expect to receive the following tax slips depending on the actions taken in your account from January 1, 2020 until Feb 28, 2021.

    Contribution receipt

    For contributions deposited...You receive...
    January 1–February 29, 2020One contribution receipt for each deposit; see under 2019 on the Tax slips page in your account
    March 5–December 31, 2020

    Note: Contributions received March 1-4, 2020 have been backdated to February 29, 2020

    One consolidated contribution receipt on January 18, 2021
    January 1–March 1, 2021One contribution receipt for each deposit, available about 3 weeks after each contribution is deposited
    • Contributions made in the first 60 days of 2021 can be claimed (deducted) for the 2020 or 2021 tax year, but not for both years. Whether you're claiming the contribution for 2020 or 2021, it must be entered as a contribution on your 2020 tax return.
    • Visit the CRA website for more information

    T4RSP/RL-2

    NR4

    • Receive an NR4 if you are a non-resident of Canada and a withdrawal occurs

    For answers to common questions, check out our RRSP Season - Frequently asked questions page.

  • SwitchArrow RESPs - Registered Education Savings Plans and Family RESPs

    A Registered Education Savings Plan (RESP) is an educational savings account in which the account holder (also referred to as a subscriber) can make contributions to a child’s (beneficiary) future post-secondary education. Family RESPs are able to have more than one beneficiary, as long as all of the beneficiaries are siblings.

    The funds in an RESP are categorized into two groups:

    • Post-Secondary Education Payments (PSE)
      • Initial contributions made to the account of after-tax funds
      • At the time of withdrawal, no additional tax filing for the beneficiary
    • Educational Assistant Payments (EAP)
      • Grants and account income
      • At the time of withdrawal, the funds are considered the beneficiary’s income, not the subscriber’s

    When the beneficiary makes an EAP withdrawal:

    • They will receive a T4A slip in their name, as the money received due to an EAP withdrawal is considered income
    • They will receive an RL-1 in as well if they are a Quebec resident
    • The funds will be taxed at the beneficiary’s tax bracket instead of the subscriber’s

    Considerations for U.S. Persons

    A subscriber who is considered a U.S person will receive a 1099-DIV and/or a 1099-INT for dividends and/or interest received in the account from U.S.-sourced investments.

  • SwitchArrow LIRAs - Locked-In Retirement Accounts

    A Locked-In Retirement Account (LIRA), or a Locked-In Retirement Plan (LRSP) depending on the jurisdiction, is generally used to accumulate pension funds outside of a pension plan. The funds inside a LIRA are not usually accessible until retirement; however, there are some exceptions which allow a LIRA to be ‘unlocked’, or withdrawn from

    If an unlocking (or withdrawal) has been made from a LIRA, the tax slips you can expect to receive are below.

    T4RSP/RL-2

    NR4

    • Receive an NR4 if you are a non-resident of Canada and a withdrawal occurs

  • SwitchArrow RRIFs - Registered Retirement Income Funds

    A Registered Retirement Income Fund (RRIF) is a retirement income account that used to be an RRSP prior to retirement. A minimum payment is required annually to provide income for the account holder.

    This minimum payment does not incur any withholding tax at the time of withdrawal (unless you are a non-resident of Canada at the time of withdrawal); however, you can choose to withdraw more than the minimum amount, up to the full value of the account. The below withholding taxes will be applied at time of withdrawal, for the amount that is in excess of the minimum.

    On amounts up to and including $5,00010% (20% for Quebec residents)
    On amounts over $5,000 up to including $15,00020% (25% for Quebec residents)
    On amounts over $15,00030% (30% for Quebec residents)

    You can expect to receive the following tax slips each year, where applicable.

    T4RIF/RL-2

    NR4

    • Receive an NR4 if you are a non-resident of Canada and a withdrawal occurs

  • SwitchArrow LIFs - Life Income Funds

    A Life Income Fund (LIF) is a retirement income account that used to be a LIRA or LRSP prior to retirement. A minimum payment is required annually to provide income for the account holder.

    This minimum payment does not incur any withholding tax at the time of withdrawal(unless you are a non-resident of Canada at the time of withdrawal), however you can choose to withdraw more than the minimum amount, up to a predetermined maximum. The below withholding taxes will be applied at time of withdrawal, for the amount that is in excess of the minimum.

    On amounts up to and including $5,00010% (20% for Quebec residents)
    On amounts over $5,000 up to including $15,00020% (25% for Quebec residents)
    On amounts over $15,00030% (30% for Quebec residents)

    You can expect to receive the following tax slips each year, where applicable.

    T4RIF/RL-2

    NR4

    • Receive an NR4 if you are a non-resident of Canada and a withdrawal occurs

  • SwitchArrow Disclaimer

    Questrade does not provide tax or accounting advice. These materials have been prepared for your information only and are not intended to provide, and should not be relied on for, tax or accounting advice. You should consult your own tax and accounting advisors for these matters.

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The information contained in this website is for information purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied is made by Questrade, Inc., its affiliates or any other person to its accuracy.

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