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Email this1:19 am
Need help.
I have put Spousal RRSP in 2008(More then 3 yrs back). I am thinking to withdraw it.
My wife is a housewife and doesn't have any income. Now if we withdraw the spousal RRSP, will there be any tax implied on that? (i.e withholding tax).
My wife's income is zero and as the RRSP withdrawl will be considered under my wife's name what will be the tax she has to pay?
Appreicate your response.
Thanks
8:38 am
December 12, 2009
Offline
The short answer is, I believe, yes. All financial institutions in Canada make RRSP withdrawals subject to at least 10% withholding tax (unless withdrawn as part of the Home Buyer's Plan) as they don't know your individual tax situation. I can't provide you with tax advice but obviously if your income is such that you didn't need to pay that tax, you may get the unnecessarily paid tax back next year when you file your income tax return.
Cheers,
Doug
8:44 am
Ankur said:
Need help.
I have put Spousal RRSP in 2008(More then 3 yrs back). I am thinking to withdraw it.
My wife is a housewife and doesn't have any income. Now if we withdraw the spousal RRSP, will there be any tax implied on that? (i.e withholding tax).My wife's income is zero and as the RRSP withdrawl will be considered under my wife's name what will be the tax she has to pay?
Appreicate your response.
Thanks
Sounds like you can do. If tax with withheld that is a good thing as you may need once you do your income vs having to pay any...if not you will get a refund. I was told when I started spousal RRSP's that if you did withdraw in the first two years (maybe 3 as per below) after the investment that "I" would be the one taxed and not my wife.
http://www.cra-arc.gc.ca/tx/nd.....l-eng.html
http://www.tdcanadatrust.com/p.....pousal.jsp
5:39 am
Your wife's tax liability will be as follows if you contributed to a spousal RRSP in 2008:
Withdrawal Amount % Tax Withheld
From $0 to $5,000 10% (5% in Quebec)
From $5,001 to $15,000 20% (10% in Quebec)
Greater than $15,000 30% (15% in Quebec)
If she has no income in 2012 she will receive a refund when she files her 2012 income tax return.
10:42 am
Many explained Tax Withholding already. Yes withhold for everybody regardless of income. And yes it can be claimed with tax return later.
However many think there is no tax impact when spouse does not have any income. But there can be if the amount is more than xxx$ (don't know exactly it is around 500$ to 1000$). It reduce the other spouse's spousal deduction and ends up paying more tax – by the other spouse's marginal tax rate.
Please write your comments in the forum.