Overview

When you take money out of your FHSA, there are rules and processes that the CRA requires us to follow. Also, the reason you withdraw from your FHSA impacts how the CRA treats your withdrawal for income tax purposes.

If you put more money into your FHSA than your contribution limit allows, you can make a designated withdrawal or transfer to reduce the excess amount. 

Make a designated withdrawal or transfer

To resolve over-contributions to your FHSA, you can make a designated withdrawal or transfer:

• Designated withdrawal: If you over-contributed to your FHSA and exceeded your FHSA participation room for the year, you can make a designated withdrawal to reduce any amount that exceeds your participation room.
• Designated transfer: If you made a transfer from an RRSP to your FHSA that exceeded your FHSA participation room, you can make a designated transfer back to an RRSP to reduce or eliminate your excess FHSA amount. You can only make a designated transfer for the same amount or less than you initially transferred from an RRSP account.

To process a designated withdrawal or transfer, please follow these steps:

1. Find your FHSA account number.
2. Fill out the RC727 form on Docusign, which instructs us on how you'd like to designate your excess FHSA amount.

Reporting FHSA over-contributions

In addition to submitting the RC727 form, you must also report your FHSA over-contribution to the CRA. You must complete the following forms when filing your tax return:

• Form RC728
• Form RC728 - Schedule A

Withdrawal timelines

The time it takes to receive your withdrawn funds depends on:

• the settlement period for any new deposits (5 business days) and
• the withdrawal timeline for your specific account type (managed or self-directed). Learn more about withdrawal timelines. 

Related articles

• Withdrawing from your FHSA for a home purchase
• Make a taxable withdrawal from your FHSA