Keith Ashfield, Minister of National Revenue, is reminding Canadians who received a Tax-Free Savings Account (TFSA) letter requesting more information that the deadline to sign and send back their return has been extended to August 3.

“The response to the Tax-Free Savings Account has been overwhelmingly positive. Over 4.7 million Canadians are taking advantage of this important savings vehicle,” Ashfield said Monday.

“Our government has made the decision to be as flexible as possible by waiving taxes on excess contributions for the first year of the program where a genuine misunderstanding of the TFSA contribution rules occurred. Moreover, we are extending the deadline from June 30 to August 3 for Canadians to sign and send back TFSA returns.”

For those investors who have received a letter with a return from the CRA regarding their TFSA, it does not automatically mean that they will be subject to a tax. It may just mean that more information is needed.

For advisors with clients that have received a TFSA letter and a return, this is what your clients need to know:

– respond to the CRA letter, no later than August 3, by providing additional information or explanations in respect of over-contributions;

– if no additional information is provided or your client does not contact the CRA, a notice of assessment will be issued.

Once the information is received, the CRA will assess the return and issue a notice of assessment. Administrative relief provisions may be available in certain instances.

More information on TFSAs, including forms and publications, can be found at www.cra.gc.ca/tfsa.

IE