Non-resident withdrawal RRSP over-contribution need help

garycpim · Post by **garycpim** » Tue Apr 08, 2008 7:48 am

Hey, I have got a complicated situation about my RRSP.
I have used $15000 as HBP in 2006 puchasing my house. Later I became non-resident in 2007. I know that I have to pay the $15000 back but not realized that it has to be within 60 days. So the repayment was late and I have checked with CRA and they told me I have to withdraw the $15000 out and file a T746 in my 2007 tax return.
However I only received the NR4 from the RRSP company and 25% was withheld and I am confused what to put it in the T746.
Could someone clarify me of what to do? Does it mean I have to report double income for both the HBP I did not repay in time, and the withdrawal of the $15000?

nelsona · Post by **nelsona** » Tue Apr 08, 2008 10:05 am

Why did you receive an NR4? The account manager should only send an NR when you withdraw money from the RRSP. Did you?

If you did withdraw funds, I believe you needed to contact CRA before you did this to allow the funds to be withdrawn without tax. T746 would only be sent in for the year you withdraw the funds.

So, I guess my question is, did you withdraw the $15000 already (in 2007), and if not, why did firm issue you an NR4?

garycpim · Post by **garycpim** » Tue Apr 08, 2008 7:47 pm

Thanks for the reply.
Yes I did withdrew $15000 from RRSP. I have contacted CRA for several times trying to get approval without tax, using T3012A. They denied my requests several times and finally I realized that the firm put the fund under wrong account(individual vs. spousal). After this I called CRA trying to figure out what to do because to my understanding if I don't withdraw $15000 out I will pay 1% every month for penalty. One of the CRA guy told me to withdraw the fund as early as possible and send in a T746 together with the 2007 tax return.
I am lost now.

nelsona · Post by **nelsona** » Wed Apr 09, 2008 5:18 am

Since you are non-resident, a tax return is not the solution. You need to send a letter, with the NR4 and the T746.

But, are you saying they withdrew the money from the wrong RRSP?

garycpim · Post by **garycpim** » Wed Apr 09, 2008 5:51 am

Well the first time fund manager put my deposit $15000 into spousal RRSP account, which was wrong. I sent in the T3012A several times and was denied and CRA's argument was that bacause the fund was deposit into spousal RRSP account, it should be my spouse to withdraw the money out. Finally I had the fund manager corrected the deposit to my own account. I was afraid that I will pay a lot of penalty while waiting to get another T3012A approval, one of the CRA rep told me to withdraw the fund out to avoid paying 1% penalty each month.

Should I send in the letter with the NR4 and T746, and not including them as income in any tax return? I have rental income from Canada so I think I still need to do the tax return. BTW, there is nowhere for me to put the NR4 box in T746:(

nelsona · Post by **nelsona** » Wed Apr 09, 2008 5:54 am

You need to do a 216 return for ther rental income of course (do you always give information in little drips), this doesn't have anything to do with your RRSP problem however.

It would still seem you took the funds out of the wrong place.

garycpim · Post by **garycpim** » Wed Apr 09, 2008 6:09 am

Thanks for the reply. When you said I took it out from the wrong place what do you exactly mean?

nelsona · Post by **nelsona** » Wed Apr 09, 2008 7:10 am

If you were supposed to put the money into your RRSP (as a payback to HBP) and it was put into your wife', and you subsequently withdrew it from your wife's then this is withdrawing the funds from the wrong account, no?

I think I've helped you all I can.

All the best.

garycpim · Post by **garycpim** » Wed Apr 09, 2008 7:14 am

Thanks for your patience.
Let me put it in a simple way: I am non-resident and over contributed $15000 RRSP accidently, and took them out as early as I can and 25% tax were withhold. Question is how can I claim the tax back?

nelsona · Post by **nelsona** » Wed Apr 09, 2008 7:50 am

Of course.

IF you took the money out of the same account you overcontributed to.

garycpim · Post by **garycpim** » Wed Apr 09, 2008 9:21 am

appreciate your answer. Will send NR4 and T746 to CRA later