Overview

This article explains the tax considerations for the different account types offered by Wealthsimple. It’s important to understand how each account type is taxed to make informed decisions about your investment strategy.

Understanding tax implications in your account

It's important to be aware of tax implications for your account. Understanding how each account type is taxed helps you make informed decisions about your investment strategy.

Select an account type to learn more:

• Non-registered accounts
• Tax-Free Savings Accounts (TFSAs)
• Registered Retirement Savings Plans (RRSPs or Spousal RRSPs)
• Registered Retirement Income Funds (RRIFs), Spousal RRIFs, and Life Income Funds (LIFs)
• Registered Education Savings Plans (RESPs and co-owned RESPs)
• First Home Savings Accounts (FHSAs)

Non-registered accounts

In non-registered accounts, all income activities are taxable. This includes:

• Dividends
• Interest earned
• Realized gains and losses

This means it's important to consider the potential tax liabilities before you sell or transfer assets in these accounts.

Non-registered accounts include:

• Non-registered self-directed investing
• Chequing
• Corporate savings
• Corporate investing
• Venture Fund
• Private Credit (if held in a non-registered account)
• Private Equity (if held in a non-registered account)

Taxes on capital gains

If you sell one of your holdings for more than you bought it for, you will have realized capital gains. When looking at tax implications, 50% of realized capital gains are taxed at your applicable marginal tax rate. This means that half of your total gains are yours to keep, while the other half is added to your total income for the year and taxed accordingly.

If you sell one of your holdings for less than you bought it for, you will have realized a capital loss. If a capital loss is realized, 50% of the loss can be used to reduce taxable capital gains. Capital losses can only be claimed against capital gains (i.e. it cannot be used to reduce any other forms of taxable income). If the capital loss cannot be used in the year that it is incurred, then it can be carried back up to 3 years previous or carried forward indefinitely.

Taxes on dividends

Dividends received from securities are considered to be income, and therefore are subject to tax when received within a non-tax sheltered account (i.e. a non-registered account).

With US-listed securities, there is also a non-resident tax (NRT) that's deducted from your account as a result of owning them within a non-registered account (Personal, Joint, or Corporate), TFSA or RESP. This is because these accounts are not recognized by the cross-border US/Canadian tax agreement. The NRT rate is 15% and is automatically deducted from your account for you. Despite this tax, there is no requirement to file any forms with the IRS.

Finally, Canadian dividends may be eligible for the dividend tax credit (reduces the taxes payable).

Tax-Free Savings Accounts (TFSAs)

A Tax-Free Savings Account (TFSA) is a way to grow your investments tax-free. While you can’t deduct TFSA contributions from your income, the returns within your TFSAs are tax-sheltered. This means you don’t pay taxes when you make withdrawals. However, you also can’t claim any losses in your TFSA. Because of these tax-free benefits, there aren’t any tax slips for TFSAs. Contribute carefully to your TFSA, as over-contributions can result in a penalty from the CRA.

Your TFSA contribution room accumulates from the year you turn 18, as long as you’re a resident of Canada for tax purposes. The annual contribution limits since the TFSAs introduction in 2009 are:

• 2009-2012: $5,000
• 2013-2014: $5,500
• 2015: $10,000
• 2016-2018: $5,500
• 2019-2022: $6,000
• 2023: $6,500
• 2024-2025: $7,000

Taxes on capital gains

There aren’t any taxes on capital gains in a TFSA.

Taxes on dividends

For US-listed securities, Wealthsimple deducts the non-resident tax (NRT) from your account, as with non-registered accounts and RESPs. This’s because the cross-border US/Canadian tax agreement doesn’t recognize these accounts. Wealthsimple automatically deducts the NRT rate. You don’t need to file any forms with the IRS.

Registered Retirement Savings Plans (RRSPs or Spousal RRSPs)

There are limits to how much you can contribute to your Registered Retirement Savings Plan (RRSP) each year. The amount you can contribute is the lower of:

• 18% of your earned pre-tax income from the previous year
• A maximum of $32,490 (for 2025)
• Your remaining limit after any company-sponsored pension plan contributions

Regardless of whether you contribute to your RRSP or a Spousal RRSP, the contribution counts towards your own contribution limit. Every Canadian is allowed to over-contribute $2,000 once in their lifetime, but if you over-contribute beyond this amount, you'll be charged a penalty tax of 1% of the over-contribution amount per month.

If you're not certain what available contribution room you have, we highly recommend setting up a CRA My Account online profile. We provide an RRSP contribution tracker, which will allow you to estimate your contribution room with some accuracy, but we still highly recommend setting up a CRA My Account profile to verify our estimation. 

Taxes on capital gains

There aren’t any taxes on capital gains in an RRSP.

Taxes on dividends

There aren’t any taxes on dividends in an RRSP.

Registered Retirement Income Funds (RRIFs), spousal RRIFs, and Life Income Funds (LIFs)

You don’t have to make a withdrawal in the year you convert to a Registered Retirement Income Fund (RRIF), but you must withdraw a minimum amount annually in the next calendar year and for all future years. The minimum amount is based on the previous year-end value of the account, and multiplied by a factor value that is determined by the government based on your age each year. If by year-end you haven't withdrawn at least the minimum amount, your RRIF, Spousal RRIF, or LIF provider will automatically send you the necessary amount.

Taxes on capital gains

There aren’t any taxes on capital gains in RRIFs, spousal RRIFs, and LIFs.

Taxes on dividends

There aren’t any taxes on dividends in RRIFs, spousal RRIFs, and LIFs.

Registered Education Savings Plans (RESPs and co-owned RESPs)

If you withdraw from an RESP for non-educational purposes, a withholding tax applies, and no further tax implications follow. There’re no tax implications for RESP subscribers (owners) when you make withdrawals for educational purposes. However, the beneficiary pays taxes on the portion that was withdrawn from grants.

Taxes on capital gains

There aren’t any taxes on capital gains in RESPs or co-owned RESPs.

Taxes on dividends

There aren’t any taxes on dividends in RESPs or co-owned RESPs.

First Home Savings Accounts (FHSAs)

FHSAs help Canadians save up to $40,000 for a first home in Canada, tax-free. You can contribute up to $8,000 per year, and unused contribution room carries forward. For example, if you contribute $5,500 in 2023, you could contribute up to $10,500 in 2024 ($2,500 from 2023 plus $8,000 for 2024). Like an RRSP, FHSA contributions reduce your taxable income, and like a TFSA, money in your FHSA (including gains) isn’t taxed. You’ll pay a 1% monthly penalty until you correct contributions over the annual limit (excluding unused portions from the previous year).

You’ll pay a 1% monthly penalty each month on any contributions over the $8,000 annual limit (except for any unused portions from the previous year) until you correct the over-contribution.

Taxes on capital gains

There aren't any taxes on capital gains in an FHSA

Taxes on dividends

There aren't any taxes on dividends in an FHSA.

Understanding tax slips for each account type

Learn about the available tax slips for different account types. Select an account type to learn more:

• RRSP, spousal RRSP and LIRA accounts
• Non-registered accounts
• Crypto accounts
• RESP accounts
• FHSA accounts
• TFSA accounts

RRSP, spousal RRSP and LIRA accounts

Non-registered accounts

Crypto accounts

RESP accounts

FHSA accounts

TFSA accounts

There aren’t any tax slips for TFSAs. As long as you stay within your contribution limit, there are no tax implications with a TFSA. Therefore, there are no corresponding tax slips.

Troubleshooting an incorrect tax slip

If you believe there's an error on your tax slip, please reach out to our support team. Please have the details of the error ready. 

If the personal details listed on your tax slip are incorrect or outdated (for example, if you moved to a new address or changed your last name), this is okay. As long as your SIN matches, the CRA will still consider the other details on the tax slip to be accurate.

Frequently asked questions